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Su Qetr ye

INTO THE

Nature and Caufes

OF THE
WEALTH or NATIONS. .

By ADAM SMITH, ‘Lu. De and F.R. 8S.
Formerly Profeffor of Moral Philofophy in the Univerfity of Guascow.
IN TWO VOLUMES.

i VOL. IL

LONDON:

PRINTED FOR W. STRAHAN; AND T. CADELL, IN THE STRAND,
MDCCLXXVi,

Publifoed by the fame Au THORs,

THE
THEORY OF MORAL SENTIMENTS::

An Essay towards an’ Analyfis of the Principles by. which:
Men naturally judge concerning the Conduct and Character, ,
firft of’ theix Neighbours, and afterwards of theméfelyes,.

TO WHICH I8 ADDED;

A. DISSERTATION on the,Oricin of LAncuacsr
The Fourth. Edition. Price 6s..

CON TEN TS

‘OR THE

FIRST VOLUME,

INTRODUCTION AND PLAN oF THE WorK Page 1
BOOK I.

Of the Caufes of Improvement in the pro-
ductive Powers of Labour, and of the Order
according to which its Produce is naturally diftri-
buted among the different Ranks of the People

CHAP. I. )
Of the Divifion of Labour =- - ibid.

CHAP. II.
Of the Principle which gives Occafion to the Divifion.of Labour’ 16

CHAP. Il.

That the -Divifion of Labour is limited by the Extent of the
Market “ - a 2i
A 2

CONTENTS.
CHAP, IV.
Of the Origin and Ufe of Money - ~ Page 27°

CHAP. V.
Of the real’ and nominal Price of Commodities, or of their
Price in Labour, and their Price in Money _° 35;
CHA B& VI.

Of the component Parts of the Price of Commodities. = 5

CHAP. VII. 4
Of the natural and market Price of Commodities. = 66) yy

CHAP... VIM.

Of the Wages of Labour = =. = 16:
‘CHAR. IX
Of the Profits of Stock. - - = 108
CH AP.. X. 7
Of Wages. and Profit in the different Employments:of: Labour
and. Stock - =. oe ~. 121

Part 1ft. Inequalities in Wages. and Profit: arifing from. the
Nature. of the. different Employments of both. = = =- 1223

Pars 2d, Lwequalities eccafioned by the Policy of Europe- 147;

CHAP... Xi.

Of the Rent of Land

179:

27"

35:
5b
66;
76
108

12!

147°

179;

CONTENTS.

Bart ift. Of the Produce of Land which always affords
Rent: ~ . - = Rage 182:

Part 2d. Of the Produce of Land which fometimes does, and
Sometines doesnot, afford Rest - “ 208

Rart 3d: Of the Variations in the Proportion between the’
refpetlive Values of that Sort of Produce which always:
affords Rent, and of that which ghia does, and. fometimes
does not afford Rent - ~ 21

Digrefion. concerning the Variations in the Value of, Silver dure
ing the Gourfe of the. meer loft. Centuries...

Firft Period -_ ihe - = 2a:
Second Period: - - > 240:
Third Period: _ - ~~ 242.
Variations in the Proportion. between: the: refpective Values of
Gold and Silver - ~ a 264.
Grounds of the. Sufpicion.that.the.Value of Si:ver fiill-continues
to decreafe - - o 270.

Different Effects of the Progrefs of Improvement: upon. the real.
Price of three different Sorts of rude Produce) = =- 2971.

Firft Sort -- an io at 272:
Second Sort - - = 274.
Third Sort: - tee be ow 286.
Gonclufion of the Digrefion concerning the Variations in. the
Valueof Silver = =: ~ 299
Effedts of the Progrefj. of alt upon the real Price of
Manufaétures - -- ~ 306.

Gouclufion of the Chapter. ~- =: gia:

CONTENT S&S,

BOOK Ii.
Of the Nature, Accumulation, and Employment
of Stock.
INTRODUCTION ~ = = «a Page 327
: CHAP. I.
Of the Divifion of Stock . - < = 330
CHAP. II.

Of Money confidered as a particular Branch of the general Stock
of the Society, or of the Expence of maintaining the National

Capital - - - 341
CHAP. It.
Of the Accumulation of Capital, or of produétive and unpro«
duttive Labour - - i 400
CHAP. IV.
Of Stock lent at Intereft ~ = a. 426
CHAP. V.

Of the different Employment of Capitals

ent

377

339

341

4oo

CONTENT S&.

BOOK I.

OF the: different’Progrefs of Optlence: in different
Nations.
CHAP. I.

Of the natural Progreft ofi Opulence: ~ os Page 45>

CHAP. ID.

Of the Difcouragement of Agriculture in the antient State of
Europe after the Fall of the Roman Empire - 466

CHAP. III.
Of the Rife and Brogreft of Gities and Towns, after. the Fall of
the Roman Empire - - - 480

CHAP. IV.
How the Commerce of the. Towns contributed to the Improvement
of the. Country - - _ 494-

CON TEN TS

OF THE

SECOND VOLUME.

BOOK Iv.
Of Syftems of political Oeconomy.

INTRODUCTION -. = = Page. 1

CHAP. I.
Of the Principle of the Commercial or Mercantile Syiem -~ @

CHAP. IL

Of Reftraints upon the Importation oS fuch Goods from Foreign
Countries as can be produced at Home = -

CHAP. If.

Of the extraordinary Reftraints upon the Importation of Goods
of almoft all Kinds, from thofe Countries with which the Ba-
lance is fuppofed to be difadvantageous - -

Digrefion concerning Banks of Depoft, particularly concerning
that of Amfterdam - - -

CHAP. IV.
Of Drawbacks - -

2ONTENTS.

ip C H A P. Vv.
— g Of Bounties ET Ea « = - Page ge
, Digrefion ary a tbe Corn Trade and Corn J yao = 105
A. ai if yp) | ‘|
i CHAP. VI.
q Of Treaties of Commerce | sh - ~ 130
i “SHAR Vite
4 ef tists, — - chusiule ota Os 1 2086
' t
| 7 Pant I. Of the Motives for hebiRing.cepCelenes, 11. 1 thlde
2 q Parr I. Gaufes of the. Projperity om new Relonies
q Part III. Of the Advantages which Bursft bas derived From’
4 the Difcovery of America, and Srom that of a abgge § to the
hight | , Bab Indies. the Clipe Gao sr ia a Foe
i CH AP. VIL.
" : Of the: Agricultural Syftems, or of tbofe Shfems of political’ tA

2} Occonomy which reprefent the “Produce of “band, “as eitBer®
the fole or the principal Source of the green, iad Wealth ef .
on Cina NE ES Oe Seat

LTE

||
|
I

vs
aes re
Ses

X aes aoaipy

Anricir me gp Yh oe oi is il lie yy ah
. tte

CONTENTS
“I Agii 9

sa BOOK Vv.

‘Of the Revenue of the Sovereign or Combenaeats.
ht j Ga BY a
CHAP. Loews \ es
of the Expences of the Sovereign 4 or Commonwealth Page 293

- ‘ Sue \s

Wey we

Part I. Of the Expence of pa "
Parr II. Op rhe Bxpince of Fullice oe ee ae

0 TAAD
Parr Ill. of the ae f pais Works Sa pale Infi j=
tutions . ttt ‘4 wait bag ° ss thw a +E = | aa

Litating the Commerce — 30

* Ammaces ad. Of the derdes yf. te one the >

Béngation tr Koi... eT ake tg yes MMvdor waves 940
uy HWS BS yin A aA) i) F “ Oa Wo 94 the 90"
Axricue oe ‘OF the Expence vw ‘tbe “Wifiturag ihe
Inftruétion of People of all Ages - e

Part IV. Of the Expence of Sepperting the Dignity of the
Sovereign -

Conclufion of the Chapter

CHAP. Ik
Of the Sources of the general or public Revenue of the Society | 412

409

410

CONTENTS,

Part I. Of the Funds or Sources of Revenue which may

peculiarly belong to the Sovereign or Commonwealth Page 412
Part Il. Of Taxes - wa = 422
ARTICLE 1ft. Taxes upon Rent co = 426
Taxes upon the Rent of Land ~ - - ibid.
Taxes which are proportioned, not to the Rent, but to the Pro-

duce of Land. = - - ~ 438
Taxes upon the Rent of Houfes - - - 442
ARTIcLE 2d. Taxes upon Profit, or upon the Revenue arifing

Srom Stock - - - - 452
Taxes upon the Profit of particular Emphoyments - 459

APPENDIX TO ARTICLES 1ft and 2d. axes upon the Ca-
pital Value of Lands, Houfes, and Steck —- = 467

ARTICLE 30. Taxes upon the Wages of Labour - 475

Articre 4th. Taxes which, it is intended, frould fall indif~
Serently upon every different Species of Revenue - 479

Capitation Taxes - - - ibid.
Taxes upon confumable Commodities = = 482
CHAP. IIl.

Of public Debts = = 2 533

AN INQUIRY

aes Se euneaea
in

Pe ea CaaS
era

4 AN

a | |
— Folie Bee Boe oy
| q ‘tet INTO THE

q NATURE ann CAUSES

’
OF THE

WEALTH oF NATIONS.

INTRODUCTION AND PLAN OF THE WORK.

HE annual labour of every nation is the fund which ori-
ginally fupplies it with all the neceffaries and conveniencies
of life which it annually confumes, and which confift
et always, either in the immediate produce of that labour, or in what

q is purchafed with that produce from other nations,

a AccoRDING therefore, as this produce, or what is purchafed
+0 a “| with it, bears a greater or fmaller proportion to the number of thofe

q who are to confume it, the nation will be better or worfe fupplied

9 with all the necefflaries and conveniencies for which it has o¢cafion.

’ Bur this proportion muft in every nation be regulated by two
a different circumftances ; firft, by the ‘kill, dexterity and judgment
a Vou, I. " .B with

Introduion.

THE NATURE AND CAUSES OF

with which labour is generally applied in it; and, fecondly, by the
proportion between the number of thofe who are employed in
ufcful labour, and that of thofe who are not fo employed. What-
ever be the foil, climate, or extent of territory of any particular
nation, the abundance or fcantinefs of its annual fupply mutt,
in that particular fituation, depend upon thofe two circumftances.

THE abundance or fcantinefs of this fupply too feems to de-
pend more upon the former of thofe two circumftances than upon
the latter. Among the favage nations of hunters and fithers, every
individual who is able to work, is more or lefs employed in ufeful
labour, and endeavours to provide, as well as he can, the neceflaries
and conveniencies of life, for himfelf, and fuch of his family or
tribe as are either too old, or too young, or too infirm to go a
hunting and fifhing. Such nations, however, are fo miferably poor,
that, from mere want, they are frequently reduced, or, at leaft,
think themfelves reduced, to the neceflity fometimes of dire&tly de-
ftroying, and fometimes of abandoning their infants, their old peo-
ple, and thofe afflifted with lingering difeafes, to perifh with
hunger, or to be devoured by wild beafts. Among civilized and
thriving nations, on the contrary, though a great number of people
do not labour at all, many of whom confume the produce of ten
times, frequently of a hundred times more labour than the greater
part of thofe who work ; yet the produce of the whole labour of the
fociety is fo great, that all are often abundantly fupplied, and a
workman, even of the loweft and pooreft order, if he is frugal and
induftrious, may enjoy a greater fhare of the neceflaries and con-
veniencies of life than it is poffible for any favage to acquire.

Tue caufes of this improvement, in the productive powers of
labour, and the order, according to which its produce is naturally
diftributed

Aprce

\,
on
ip
e¢
axe
wee >
fe
By
Be
ee?
iN
Ree
be
ES
Ly
t
¢

Te ee en re,
CU RL a i TRS aE aA ae ae
set serpin arene ii she :

THE WEALTH OF NATIONS.

eH } +H H . Introdudtion.
diftributed among the different ranks and conditions of men in the

fociety, make tie fubjeé&t of the Firft Book of this Inquiry.

WHATEVER be the actual ftate of the fkill, dexterity, and judg-
ment with which labour is applied in any nation, the abundance
or fcantinefs of its annual fupply, muft depend, during the con-
tinuance of that ftate, upon the proportion between the number of
thofe who are annually employed in ufeful labour, and that of thofe
who are not fo employed. The number of ufeful and productive
jabourers, it will hereafter appear, is every where in proportion to the
quantity of capital ftock which is employed in fetting them to work, and
to the particular way in which it is fo employed. The Second Book,
therefore, treats of the nature of capital ftock, of the manner in
which it is gradually accumulated, and of the different quantities of
labour which it puts into motion, according to the different ways
in which it is employed.

Nations tolerably well advanced as to fkill, dexterity, and judg-
ment, in the application of labour, have followed very different
plans in the general condu& or direction of it; and thofe plans
have not all been equally favourable to the greatnefs of its produce,
The policy of fome nations has given extraordinary encouragement
to the induftry of the country; that of others to the induftry of
towns. Scarce any nation has dealt equally and impartially with
every fort of induftry. Since the downfal of the Roman empire,
the policy of Europe has been more favourable to arts, manufac-
tures, and commerce, the induftry of towns; than to agriculture, the
induftry of the country. The circumftances which feem to have
introduced and eftablithed this policy are explained in the Third Book.

.Tuoucn thofe different plans were, perhaps, firft introduced by
the private interefts and prejudices of particular orders of men, with-
B 2 out

4 THE NATURE AND CAUSES OF

Introdudion. out any regard to, or forefight of, their confequences upon the
general welfare of the fociety; yet they have given occafion to very
different theories of political ceconomy ; of which fome magnify the i
importance of that induftry which is carried on in towns, others of
that which is carried on in the country. Thofe theories have had a ait
confiderable influence, not only upon the opinions of men of learn-
ing, but upon the public conduct of princes and fovereign ftates. I
have endeavoured, in the Fourth Book, to explain, as fully and dif- ell "
tinly as I can, thofe different theories, and the principal effects a
which they have produced in different ages and nations.

In what has confifted the revenue of the great body of the i
people, or what is the nature of thofe funds which, in different x
ages and nations, have fupplied their annual confumption, is treated :
of in thefe four firft Books. The Fifth and laft Book treats of the
revenue of the fovereign, or commonwealth. In this Book I have
endeavoured to fhow; firft, what are the neceffary expences of the
fovereign, or commonwealth; which of thofe expences ought to
be defrayed by the general contribution of the whole fociety; and
which of them, by that of fome particular part only, or of fome
particular members of the fociety : fecondly, what are the different
methods in which the whole fociety may be made to contribute
towards defraying the expences incumbent on the whole fociety,
and what are the principal advantages and inconveniencies of each
of thofe methods : and, thirdly and laftly, what are the reafons and
caufes which have induced almoft all modern governments to mort-
gage fome part of this revenue, or to contract debts, and what, have
been the effects of thofe debts upon the reai wealth, the annual
produce of the land and labour of the fociety.

BOQK

ee THE WEALTH OF NATIONS,

| 2 BOokK 1

| # Of the Caufes of Improvement in the productive Powers of
a . Labour, and of the Order according to which its Pro-
| duce is naturally diftributed among the different Ranks
ae of the People.

CHAP. I.

Of the Divifion of Labour.

HE greateft improvements in the productive powers of La-
bour, and the greater part of the fkill, dexterity, and judg-
ment with which it is any where directed, or applied, feem to have
been the effects of the divifion of labour.

Tue effects of the divifion of labour, in the general bufinefs of
fociety, will be more eafily underftood, by confidering in what
manner it operates in fome particular manufactures. It is com-
monly fuppofed to be carried furtheft in fome very trifling ones 3
not perhaps that it really is carried further in them than in others
of more importance : but in thofe trifling manufatures which are
deftined to fupply the {mall wants of but a fmall number of people,
the whole number of workmen mutt neceffarily be {mall ; and thofe

: 4 employed in every different branch of the work can often be collected
. into the fame workhoulfe, and placed at once under the view of the fpec-
4 tator, In thofe great manufactures, on the contrary, which are
aq deftined to fupply the great wants of the great body of the people,
a every different branch of the work employs fo great a number of

Be workmen»

BOOK
J,
CHAP.
I.

THE NATURE AND CAUSES OF

B sad K workmen, that it is impoffible to collet them all into the fame work-
t———_ houfe. We can feldom fee more, at one time, than thofe employed

in one fingle branch, Though in them, therefore, the work may
really be divided into a much greater number of parts, than in thofe
of a more trifling nature, the divifion is not near fo obvious, and
has accordingly been much lefs obferved.

To take an example, therefore, from a very trifling manufac-
ture; but one in which the divifion of labour has been very often
taken notice of, the trade of the pin-maker ; a workman not edu-
cated to this bufinefs (which the divifion of labour has rendered
a diftin@ trade), nor acquainted with the ufe of the machinery
employed in it (to the invention of which the fame divifion of
labour has probably given occafion), could fcarce, perhaps, with his
utmoft induftry, make one pin in a day, and certainly could not
make twenty. But in the way in which this bufinefs is now carried
on, not only the whole work is a peculiar trade, but it is divided
into a number of branches, of which the greater part are likewife
peculiar trades. One man draws out the wire, another ftraights it,
a third cuts it, a fourth points it, a fifth grinds it at the top for re-
ceiving the head; to make the head requires two or three diftin®
operations ; to put it on, is a peculiar bufinefs, to whiten the pins is
another; it is even a trade by itfelf to put them into the paper ;
and the important bufinefs of making a pin is, in this manner, di-
vided into about eighteen diftinct operations, which in fome manu-
factories are all performed by diftin& hands, thoughin others the fame
man will fometimes perform two or three of them. I have feen a
{mall manufactory of this kind where ten men only were employed,
and where fome of them confequently performed two or three
diftin& operations. But though they were very poor, and there
fore but indifferently accommodated with the neceflary machinery,
they could, when they exerted themfelves, make among them about

8 twelve

THE WEALTH OF NATIONS. 7
work- a twelve pounds of pins in a day. There are in a pound upwards of FHF?
ployed a four thoufand pins of a middling fize. Thofe ten perfons, theres -—\~—~
kK may a fore, could make among them upwards of forty-eight thoufand pins
| thofe ny in a day. Each perfon, therefore, making a tenth part of forty~
and a eight thoufand pins, might be confidered as making four thoufand

of eight hundred pins in a day. But if they had all wrought feparatcly

4 and independently, and without any of them having been educated
nufac- a to this peculiar bufinefs, they certainly could not each of them have
often aS made twenty, perhaps not one pin in a day; that is, certainly,
- edu- * not the two hundred and fortieth, perhaps not the four thoufand
dered ae eight hundredth part of what they are at prefent capable of per-
linery ’ forming, in confequence of a proper divifion and combination of
on of a their different operations.
ith his ‘.
ld not a" In every other art and manufadure, the effects of the divifion
arried of of labour are fimilar to what they are in this very trifling one ;
ivided though, in many of them, the labour can neither be fo much fub-
venpifte divided, nor reduced to fo great a fimplicity of operation. The di-
hts it, a vifion of labour, however, fo far as it can be introduced, occafions,
or re= ag in every art, a proportionable increafe of the productive powers of
‘Rind . | labour. The feparation of different trades and employments from
ie ta a one another, feems to have taken place, in confequence of this
aper ¢ a advantage. This feparation too is generally carried furtheft in
r, di- 4a thofe countries which enjoy the higheft degree of induftry and im-
nanu- 4 provement ; what is the work of one man, in a rude ftate of fociety,
» fame a being generally that of feveral, in an improved one. In every im-
feen a 3 proved fociety, the farmer is generally nothing but a farmer; the
loyed, a "| manufacturer nothing but a manufacturer. The labour too which
three a is neceflary to produce any one coinplete manufacture, is almoft
there a always divided among a great number of hands. How many
inerys a different trades are employed in each branch of the linen and woollen
about : manufactures, from the growers of the flax and the wool, to the

twelve bleachers

THE NATURE AND CAUSES OF

BOOK bleachers and fmoothers of the linen, or to the dyers and dreffers of
eve the cloth! The nature of agriculture, indeed, does not admit of fo

many fubdivifions of labour, nor of fo complete a feparation of one
bufinefs from another, as manufactures. It is impoffible to feparate
fo entirely, the bufinefs of the grazier from that of the corn-farmer,
as the trade of the carpenter is commonly feparated from that of the
fmith. The fpinner is almoft always a diftin& perfon from the
weaver; but the ploughman, the harrower, the fower of the feed,
and the reaper of the corn, are often the fame. The occafions for
thofe different forts of labour returning with the different feafons of
the year, it is impoffible that one man fhould be conftantly employ-
ed in any one of them. This impoffibility of making fo complete
and entire a feparation of all the different branches of labour em-
ployed in agriculture, is perhaps the reafon why the improve-
ment of the produétive powers of labour in this art, does not
always keep pace with thcir improvement in manufaétures. The
moft opulent nations, indeed, generally excel all their neighbours in
agriculture as well as in manufaCtures; but they are commonly more
diflinguifhed by their fuperiority in the latter than in the former.
Their lands are in general better cultivated, and having more la
bour and expence beftowed upon them, produce more, in propor=
tion to the extent and natural fertility of the ground. But the
fuperiority of produce is feldom much more than in proportion to
the fuperiority of labour and expence. In agriculture, the labour
of the rich country is not always much more produétive than that
of the poor; or, at leaft, it is never fo much more productive, as it
commonly is in manufactures. The corn of the rich country, there-
fore, will not always, in the fame degree of goodnefs, come cheaper
to market than that of the poor. The corn of Poland, in the fame
degree of goodnefs, is as cheap as that of France, notwithftanding
the fuperior opulence and improvement of the latter country. The
corn of France is, in the corn provinces, fully as good, and in moft

years

Ters of
t of fo
of one
‘parate
farmer,
of the
m the
e feed,
ons for
fons of
nploy-
mplete
Ir em-
prove-=
yes not
The
ours in
y more
former.
ore lae
yropor=
jut the
‘tion to
labour

an that
ey as it
there-

heaper
e fame
anding
The

n moft
years

See er : = ot
La aes Sy AWS peel
mS =) ae ae

a fecondly, to the faving of the time which is commonly loft in

a absidge labour, and enable one man to do the work of many.

A Rg 3 naici
Face So ae ae pale

THE WEALTH OF NATIONS.

years nearly about the fame price with the corn of England,
though, if opulence and improvement, France is perhaps ine ——~
ferior to England, The lands of England, however, are. better
cultivated than thofe of France, and: the lands of France are faid

to be much better cultivated than thofe of Poland. But though

the poor country, notwithftanding the inferiority of its culti-

} vation, can, in fome meafure, rival the rich in the cheapnefs and

a goodnefs: of its corn, it can pretend to no fuch competition in its
manufaétures ;_ at leaft if thofe manufactures fuit ‘the foil, climate,

and ‘fituation of the'rich country. The filks of France are better

and cheaper. than thofe of England, becaufe the filk manufacture

q does not fuit the climate of England: But the hardware and the

x ‘coarfe woollens’ of England are beyond all comparifon fuperior to

a thofe of France; and much cheaper too in the fame degree of

a goodnefs. In Poland there are faid to:be farce any manufactures

| of any kind, .a few: of thofe coarfer houfehold mianuifactures ex.

cepted, without which. no country can well fubfitt.

Tuts great increafe of the quantity of: work, which the fame
number of people are:capable of performing, in. confequence of

’ the divifion: of labour, is; owing to. three, different circumftances ;
firft, . to the ‘increafe. of dexterity, in. every particular workman ;

pafling from one fpecies of. work to another; and laftly, to the
-inyention. of, a great number of machines which facilitate and

Firsr,, the ote of. the dexterity of the workrhan ne-
ceflarily ‘increafes! the quantity of the work he can perform, and
the: divifion| of jlabour,..by reducing every man’s bufinefs to. fome
‘one fimple operation, :and by; making this operation the fole em-
ployment of his life, neceflarily increafes very much the dexterity

Vou. I. Cc of

THE NATURE AND CAUSES OF

of the workman. A common fmith, who, though accuftomed to
handle the hammer, has never been ufed to make nails, if upoa
fome particular occafion he is obliged to attempt it, will fcarce, I
am affured, be able to make above two or ti.ce hundred nails in
a day, and thofe too very bad ones. A fmith who has been accuf-
tomed to make nails, but whofe fole or principal bufinefs has not
been that of a nailer, can feldom with his utmoft diligence make
anore than eight hundred or a thoufand majls in a-day. J have
feen feveral boys under twenty years of age who had never «x.i-
cifed any other trade but that of making nails, and who, whea
they exerted themfelves, could make, each of them, upwaids of
two thoufand three hundred nails in a day. ‘The making of a
nail, however, is by no means one of the fimpleft operations. The
fame perfon blows the bellows, ftirs or mends the fire as there iis
eccafion, heats the iron, and forges every part of the nail: In
forging the head too he is obliged:to changelhis tools. The different
operations into which the making of a pin, or of ‘a metal button,
is fubdivided, are all of them much more fimple, and the dex-
terity of the perfon, of whofe life it has \been the fole bufinefs
to perform them, ‘is ufually much greater. The rapidity with
which fome of the operations of thofe manufactures are performed,
exceeds what the human ‘hand could, ‘by thofe ‘who had: never feen
them, be‘fuppofed capable of acquiring. |

Seconpiy, the advantage which is gained by faving ‘the time
commonly loft in paffing from ‘one fort ‘of ‘work ‘to another, is
much greater than we fhould at firft view be apt to imagine it.
It is impoffible to pafs very quickly from oneteind of ‘work to an-
other, that is carried on in a‘differsut piace, vand-wath quite differ-
‘ent ‘tools. A country weaver, ‘who ‘cultivates ‘a'{mall farm, ‘muft
‘lofe a good deal of time‘in paffing from ‘his loom 'to'ehe! field, cand
‘from the field ‘to ‘his loom, ‘When :the two trades ican ‘be :cav-

A ried

a THE WEALTH OF NATIONS. un
ed to 7) tied on in the fame workhoufe, the loft of time ia'mo doubt much CHAP,
upoa WW tefs, It is evew im this cafe, however, very confidewable. A man -y—~
roe, I r commonly faunters a little in turning his hand from one fort of
‘ils in a employment to another. When he firft begins the new work he
ecufe 4 is feldom very keen and hearty; his mina, as they fay, docs not
is not i go to it, and for fome time he rather triftes than applies to good
make | purpofe. The habit of fauntering and of indolent caretels ap-
have it plication, which is naturally, or rather neceflarily acquired by
eXul- a every country workman who is obliged to change itis work and
whea a his tools every half hour, and to apply his hand im twenty different
sds of i. ways almoft every day of his life; renders him almoft alw's flewh-
} of a fA ful and lazy, and incapable of any vigorous application even en
, The a the moft prefling occafions. Independent, therefore, of Ais di
here is 4 ficiency in point of dexterity, this caufe alone muft always rm tu
1; In 7” confiderably the quantity of work which he is capable of pe’ "wm-
ferent My ing.

dex- es Tuirpd1y, and laftly, every body muft be fenfible how mach
ufinefs mM labour is facilitated and abridged by the application of proper ».a-
with | chinety. It isunneceffary to give any example. I fhall, therefeee,
brmedl Po only obferve that the invention of all thofe machinesby whic
rfeen q labour is fo much facilitated and abridged, feems to have bee»
a originally owing to the divifion of labour. Men are much more
q Hikely-to dif¢over eafier and! réadier methods of attaining any object
ime et when the whole attention of their minds is dire€ted towards that
her, is 3 fingle object, than when it is diffipated ayiong a great variety of
bine tt. j things. But in confequence of the divifion of labour, the whole
40 \an« a of every man's attention comes naturally to be directed towards
differ- 7 fome one'vety fimple object. It is naturally to be expected, ‘theres
mutt ; fort, that fome ont er otter of thofe who are empiyyed in: cach
1, cand particular brancli‘of laboin" fhould {gon find out eafier and readier
le :cat- _ methods of performing’ thei’ own particular work wherever the
ried rs C2

nature

THE NATURE AND CAUSES OF

BOOK nature of it admits of fuch improvement. A great part of the
I. e . e Oo e
—— machines employed in thofe manufactures in which labour is moft

fubdivided, were originally the inventions of common workmen,
who, being each of them employed in fome very fimple operation,
naturally turned their. thoughts towards finding out eafier and
readier methods of performing it.. Whoever ‘has been much
accuftomed to vifit fuch’ manufactures, muft> frequently have
been fhown very pretty machines, which: were the inventions of
common workmen in order to facilitate and quicken. their owm
particular part of the work, In the firft fire-engines, a boy was
conftantly. employed to open and fliut alternately the communi-
cation between the boiler and the cylinder, according, as the pifton
either afcended or defcended. One of thofe boys, who loved. ta
play with his companions, obferved that, by tying a ftring from
the handle of the valve; which. opened this communication, ta
another part of the machine, the valve would open and fhut
without his affiftance, and leave him at liberty to divert himfelf
with his play-fellows. One of the greateft improvements. that
has been made upon this machine, fince it was firft invented;
was. in this manner the difcovery of a boy who wanted to fave.
his own labour.

At the improvements in: machinery, however, have by. no
means been the inventions of thofe who had occafion to ufe the
machines. Many improvements: have been: made by the ingenuity
of the makers of the machines, when. to. make. them: became
the bufinefs of a peculiar trade; and fome by that of. thofe. who
are called philofophers or men of fpeculation,, whofe. trade. it is,
not to do any thing, but to obfeive every thing 5. and who, upon
that account, are often capable of combining together. the powers
of the moft diftant and diflimilar objeéts, In. the progrefs of
fociety, philofophy or fpeculation becomes, like every other emr
ployment,

of the
; moft.
kmen,
‘ation,
rr and
much
have
ons of
ir OW
oy was
muni-
. pifton
ved. ta
x from
jon, ta
id fhut
himfelf
ts. that
vented;
to fave

‘by. no
ufe the
bgenuity
became
ofe. who
de.it is,
Oo, upon
powers
bgrefs of
her em-r
oyment,

THE WEALTH OF NATIONS.

ployment, the principal or fole trade and occupation of a particular Cc HA Ps
clafs of citizens. Like every other. employment. too, it is fube —+—~,

divided into.a great number of different ‘branches, each of which
affords occupation to a peculiar tribe or clafs of philofophers; and
this fubdivifian. of employment in philofophy, as well as in every
other. bufinefs, improves dexterity and faves time, Each: indi-
vidual. becomes. more expert in. his. own peculiar branch, more

work is done upon the whole,, and the quantity of. fcience is con=
fiderably increafed by it.

Tr is the great multiplication of: the’ productions of all: the
different. arts, in confequence. of the. divifion. of. labour, which
occafions in. a. well governed. fociety that univerfal.opulence: which

extends itfelf to the loweft ranks. of. the people. Every workman.

has a great quantity of his own work to.difpofe of. beyond what-he
him(elf. has occafion for ;. and every: other. workman. being. exactly:
in the fame fituation,, he is enabled to. exchange a great quantity
of his own.goods for a great quantity, or, what-comes to the fame
thing, for the. price. of a great quantity. of theirs. He fupplies
them abundantly with what they. have occafion for, and they

accommodate. him as amply with what he has occafion for, and a.

gencral plenty diffules itfelf through all the different ranks of the
focicty..

Oxserve the cetasgmniriols of the moft common artificer. or
day-labourer i in a.civilized and, thriving country, .and you. will
perceive that the number of people of whofe induftry a. part;
though but a {mall part, has been employed in procuring him this
accommodation exceeds. all computation. ‘The woollen coat, for
example, which covers .the day-labourer, as ‘coarfe. and: rough

‘as it. may appear, is the produce of the joint labour.of a great

multitude of workmen. The Shepherd, the forter of the wool,
the

THE NATURE AND CAUSES OF

BAG K the wool-comber or carder, the dyer, the fcribbler, the fpinner,
Lenya the weaver, the fuller, the dreffer, with many others, muft all

join their different arts in order to complete even this homely
production. How many merchants and carriers, befides, muft
have been employed in tranfporting the materials from fome of
thofé workmen to others who often live in a very diftant part
of the country! how much commerce and navigation in particu-
lar, how many-thip~builders, faifors, fail-makers, rope-makers,
muft have been employed in order to bring together the different
drugs made ufe of by the dyer, which often come from the remoteft
corners of the world! Whiat a variety of labour too is neceffary
in order. to produce the tools of the meaneft of thofe workmen !
To fay nothing of fach complicated machines as the fhip of the
failor, the mill of the fuller, or even the loom of the weaver, let
us confider only what a variety of labour is requifite in order to
form that very fimple machine, the fhears with which the fhepherd
clips the wool. ‘Fhe miner, the builder of the furnace for fmelt-
ing the ore, the feller of the timber, the burner of the charcoal
to be made ufe of in the fmelting houfe, the brick-maker, the
brick-layer, the workmen who attend the furnace, the mill-
wright; the forger, the {mith, muft all of them join their differ-
ent arts in order to produce them. ‘Were we to examine, in the
fame manner, all the different parts of his drefs and houfehold
furniture, the coarfe linen fhirt which he wears next his fkin,
the fides which cover his feet, the bed which he lies on, and all
the different pats which compofe it, the kitchen grate at which
he prepates His victuals, the ‘coals which he makes ufe of for that
purpofe, dug from ‘the bowels of the earth, and brought to him
perhaps bya long fea anda Jong land carriage, alf the other utenfils
of his kitchen, all the furniture df his table, the knives and forks,
the earthen or pewter plates upon which he’ ferves up and divides
his victuals, the different hands employed in preparing his bread
and

inner,
ift all
omely
muft
me of
t part
articu-
sakers,
fferent
moteft
ceffary
kmen !
of the
er, let
rder to
epherd
{melt-
arcoal
er, the
> mill-
differ-
in the
fehold
s fkin,
and all
which
or that
to him
itenfils
N forks,
divides
s bread
and

THE WEALTH OF NATIONS,

and his beer; the glafs window which lets in the heat and the light, CHAP.
and keeps out the wind and the rain, with all the knowledge and ey

art requifite for preparing that beautiful and happy invention,
without which thefe northern parts of the world could fcarce have
afforded a very comfortable habitation, together with the tools of
all the different workmen employed in producing thofe different
conveniencies ; if we examine, I fay, all thefe things, and confider
what a variety of Jabour is employed about each of them, we fhall
be fenfible that without the affiftance and co-operation of many:
thoufands, the very meaneft perfon in a civilized country could not

‘be provided, even according-to what we very falfely imagine the eafy

and fimple manner in which hé is commonly accommodated. Com-
pared, indeed, with the more extravagant luxury of the great, his
aceommoedation muft no doubt appear extremely fimple and eafy ;.
and yet it may be true perhaps that the accommodation -of an
European prince does not always fo much exceed that of an in-
duftrious and frugal peafant, as the accommodation of the latter

exceeds that of many an African king, the abfolute mafter of the
lives and liberties of ten thoufand naked favages.

3B a KR
Seon sme

THE NATURE AND CAUSES OF

CHAP. IL ,
Of the Principle which gives Occafon to the Divifion of Labour.

HIS divifion of labour, from which fo many advantages are

derived, is not originally the effect of any- human wifdom,
which forefees and intends that general opulence to which it gives
occafion, It is the neceffary, though very flow and gradual con-
fequence of a certain propenfity in human nature which has in
view no fuch extenfive utility the.propenfity to truck, barter,
and exchange one thing for another.

Wnheruer this propenfity be one of thofe original principles
in human nature, of which no further account. can be given; or

‘whether, as feems more probable, it. be the neceflary confequence

of the faculties of reafon and fpecch, it, belongs not to our prefent
fubject to enquire. . It is common to all men, and to be.found in
no other race of animals, which feem to know neither this nor any
other fpecies of contracts. Two greyhounds in running down the
fame hare, have fometimes the appearance of acting in fome fort
of concert. Each turns her towards his companion, or endeavours
to intercept her when his companion turns her towards himéfelf.
This, however, is not the effect of any contract, but of the acci-
dental concurrence of their paffions in the fame object at that
particular time. Nobody ever faw a dog make a fair and deliberate
exchange of one bone for another with another dog. Nobody
ever faw one animal by its geftures and natural cries fignify to
another, this is mine, that yours; I am willing to give this for
that. When an animal wants to obtain fomething either of a
man or of another animal, it has no other means of perfuafion
but to gain the favour of thofe whofe fervice it requires. A puppy
fawns upon its dam, and a fpaniel endeavours by a thoufand

attractions

hour.

ges are
rifdom,
it. gives
al con-
has in
barter,

inciples
ren; or
quence
prefent
ound in
nor any
own the
me fort
jeavour's
himéelf.
he acci-
at that
eliberate
Nobody
pnify to
this for
er of a
prfuafion
a puppy
houfand
ractions

THE WEALTH OF NATIONS:

attractions to engage the attention of its malter who is at dinner, CHAP.
when: iti‘wants: to be fed by him.:. Man fometimes ules the fame? ===

artswith his brethren, and when’ he‘has no other means of ens.
gaging :thém to act according to his inclinations, endeavours. by
every fervile and fawning attention to obtain their good will. He
has. not time; however, to do this upon every occafion, In civi-
lized: fociety he ftands at all times in need of the co-operation and
affiftance of great multitudes, while his whole life is {carce fuf-
ficient to gain the. friendfhip of .a few perfons. In almoft every
other race of animals each individual, when it is grown up to
maturity, is, intirely . independant, and in its natural ftate has oc-
cafion for the affiftance of no other living creature. , But man has
almoft conftant occafion . for the help of his brethren,, and it is in
vain for him to expect it from their benevolence only. He will be
more likely to, prevail, if he can intereft their felf-love-in his favour,
and. fhew, them.that it: is: for, their own advantage to do for him
what,he, requires of them. . Whoever. offers to another a bargain
of any kind, -propofes to do this. Give me that which I want,
and. you fhall have. this which you want, is the meaning of every
fuch .offer; and it is in this manner, that, we obtain from one an-

‘other the, far. greater, part of thofe good. offices which we ftand

in need of, It is not from the. benevolence .of the butcher, the
brewer, or the baker, that we expect our dinner, but from their
regard to their own intereft. We addrefs ourfelves not to their

humanity but to their felf-love, and never talk to them of our

own neceffities but of their advantages, Nobody but a beggar
chufes to depend chiefly upon the benevolence of his fellow citi-
wens. Even a beggar does not depend upon it entirely. The
charity of well difpofed people, indeed, fupplies him with the
whole fund of his fubfiftence. But though this principle ultimately
provides him with all the neceffaries of life which he has-occafion
for, it neither does nor can provide him with them as he has

Vor. I. D occafion

asian enamine
Sime Senay oe

papas
anata cae

= sa
RT eet =
nn

BOOK

THE NATURE’ AND CAUSES OF

occafion for them. The greater part of his occafional wants are

| fupplied in the fame manner as. thofe-of ather people, by treaty,

by barter, and by :purchafe. With the: money which one man
gives im he purchafes food. The old cloaths which another
beftows upon him he exchanges for other old cloaths which fuit
him better, or for lodging, or'for food, ‘or for money, with which
he can buy either food, cloaths, or-lodging, | as he has occafion.

As it is by treaty, by barter, and ‘by purchafe, that’ we obtain
from one ahother the greater part of thofe ‘mutual ‘good ‘offices
which weftand in need of, fo it is this fitte erudkihg difpofition
which ‘originally gives occafion to the divifion’ of ‘labour. “th ‘a
tribe of Hunters or fhepherds a ‘particular ‘perfotr inakes bows ‘and
arrows, for example, with mort teadinefs and dexterity than ‘any
other. ‘He frequently exchangts them for cattle or for venifon
with his companions ; arid He ‘finds at laft that ‘he tdh in this mans
her get more cattle and Veriifon, than -if he hinifelf went''té the
ficld’to' catch them. Froth a regard to his own initéieft, theréfore,
the making of ‘bows and arrows gtows to behis: chief bufinefs,
and ‘he becomes fort of armourer: “Another ‘excels iin making
the frames atid ‘covers of their ittle huts or moveable‘houfes, -He
is accuftoined to be ‘of ufe in this way ‘to ‘his ‘neighbours, who
reward him in the fame manner with cattle and ‘with venifon, till
at laft he finds it his intereft to dedicate himéelf ‘intirely to this
employment, and to ‘become a fort’-of houfe-carpenter. In the
fame manner'a third becomes a:fmith or a brazier, a fourth a tan-
ner or drefler of hides or tkins, the principal part of the cloathing
of favages. And thus the certainty of being able to exchange -all
that furplus part of the produce of his own labour, which is over
and above his own confumption, for fuch parts of the produce of
other mens labour as he may have occafion for, encourages every
man to apply himfelf to a particular occupation, and to cultivate
and

a tane

loathing
ange -all
is over
pduce of
es every
cultivate
and

THE: WEALTH OF NATIONS.

and: bring. to perfeStion: whatever talent or genius he may: patiels
forthat particular fpecies of bufinefs, ©” : bah ;

: Tue difference'of naturel talents in different men is, in reality,
much lefs than we are aware of ; and the very different genius
which: appears to’ diftinguith tien’ of diffetent profeffions;' when
grownup to maturity, ‘is’ not trpan many ‘ecdafions fo much the
caufe; as the effect of ‘the divifton' of labour. ‘The difference
between the moft diffimilar characters,’ between a philofopher and
‘@ common ‘fireet~ porter, for example; feenis to -arift ‘nov fo much
from ‘naturé)'ds‘from ‘habit, ‘cuftom, and ediication. When ‘they
‘came ‘intd “the! world; and for thé ‘firft fix‘or eight years of théir
exiftence, they were perhaps very mich alike, and neither’ their
‘parents ‘nor play-fellows could perceive any remarkable difference.
About’ that’ age’ or foon after, ‘they ‘come to be employed ‘in ‘very
diffefent ogcupations,’ The difference ‘of “talerite domes: then to
be’ taken “Hotice ‘of, and widens by degrees,’ till at laftithe vanity
‘of the: philofopher: is willing: to acknowledge fearce any refem-
‘blance. But without the’ difpofition’ to truck, barter, and ex-
change, every man muft have procured to himfelf every neceffary
and conveniency of life which he wanted. All muft have had the
fame duties to perform, and the fame work to do, and there could
have been no fuch difference of employment as could alone give
occafion to any great difference of talents.

As it is this difpofition which forms that difference of talents,
fo remarkable among men of different profeffions, fo it is this
fame difpofition which renders that difference ufeful, Many tribes
of animals acknowledged to be all of the fame fpecies, derive from
nature a much more remarkable diftinétion of genius, than what,
antecedent to cuftom and education, appears to take place among
men, By nature a philofopher is not in genius and difpofition

D2 half

f f]
II.
ain deed

FHE NATURE AND: CAUSES OF

half fo: different from a ftreet porter, as a maftiff.is from a‘grey~
hound, or a greyhound from. a fpaniel, or this Jaft from 1a fhep»
herd’s dog. Thofe different tribes of animals, however, tho’ all
of the fame fpecies, are of fcarce any-ufe.to.one -another. ;; ‘The
ftrength of the maftiff is not, in the. leat, fupported. either by
the fwiftnefs of the greyhound, .or by: the fagacity .of.the. {paniel,
or by the docility,.of the thepherd’s,, dog. ... The -effeéts of . thofe
different geniufes and talents, for. want of ;the power or difpofition
to: barter and exchange, cannot be brought into:a common ftock,
and do notin; the leaft contribute to the better accommodation..and
conveniency of the fpecies.. Each, animal. is ftill obliged to fuppont
and. defend. itfelf,. feparately.;and imdependantly, .and_ derives
no fort of .advantage from. that variety, of talents with which
nature has. diftinguifhed its fellows. A:nong; men, on, the. conr
trary, the moft. diffimilar geniuies are of ufe ta ane another ;,.the
different produces of. their refpective talents, by; the. general. dif,
pofition to truck,.: barter, and exchange, being. brought,) as. it
-were, into a cammon.ftock, where every. man, may ,purchaf&
-whatever part of the produce of other men’s, talents, he has, ac
cafion. for,. Lot |

a‘grey~
a fhep+
tho’ all
«> The
ther by
fpaniel,
f, .. thofe
pofition
n ftock,
ion. and
fupport
derives
Which
he. conr
er 3, the
ral. dif,
| aS. dt

ourchaf.
has, Ot re

THE WEALTH OF NATIONS.

CHAP. IU.
That the Divifion of Labour is limited by the Extent of the Market.

S itis the, power of exchanging that gives occafion to the C y A P,
divifion of labour,’ forthe extent of this divifion muft always w-+y—~

be. limited by the extent of that power, or, in other words, by
the extent of the market. When the market is very fmall, no
perfon'can have any encouragement to dedicate himfelf entirely. to
one employment, for want of the power to exchange .all that furplus
part of the, produce of his own, labour, which,is,over-and above
his own confumption, for fuch parts of the produce.of other.mens:
labour as he has occafion for..

‘Tuers.are. fome. forts of induftry, even of the loweft. kind,.

.which cam be:carried, on no-where but ina great town... A porter,

for example; can find employment and fubfiftence in. no other
place... A village is by. much too: narrow: a {phere.for him.; even:
an ordinary. market. town. is fcarce large enough: to afford him
conftant occupation. In. the lone houfes and very. fmall vil-
lages which are fcattered about in fo defart. a country as the:
highlands of Scotland, every farmer muft be butcher, baker. and:
brewer for his own family. In fuch fituations we can {carce
expect. to find even a fmith, a carpenter, or a mafon, within lefs.
than twenty miles of another of the fame trade.. The {cattered.
families. that live at eight or ten miles diftance from.the neareft of
them, muft learn to. perform. themfelves a. great number of little:
pieces of work,, for which, in. more populous countries, they
would call in the affiftance of thofe. workmen. - Country. workmen:
are almoft every where obliged to apply themfelves to all the differ-
ent branches of induftry that have fo much affinity to one another

8 u as:

BOOK

THE NATURE AND CAUSES OF

as to be employed about the fame fort of materials. A country
carpenter deals in every fort of work that is made of wood: a
country fmith in every fort of work that is made of iron. The
former is not only a carpenter, but a joiner, a cabinet-maker, and
even a carver in wood, as well as a wheel-wright, a plough-
wright, a cart and waggoh maker. ‘Fhe employments of ‘the latter
are ftill mere various, It is impoffible there fiould' be fach'a
trade as even that of a nailer in the remote and inland patts-of
the highlands of Scotland. - Such a workman at thé! rate of'a
thoufand nails a day, and three hundred working days in the year,
will make three. hundred thoufand ‘nails in the year. But! in fach
a: fituation it would be impoffible to difpofe of one thoufand, that
is, of one day’s work im the year.

As by means of water-carriage a more extenfive market is
opened to every fort of induftry than what land-carriage alone can
afford it, fo it is upon the fea coaft, and along the’banks of ‘navi-
gable rivers, that induftry of every kind naturally begins to fub-
divide and improve itfelf; end it is frequently not till 2 long’ time
after that thofe improvements extend themfelves to the inland parts

-of the country. A broad-wheeled waggon, ‘attended by two men

and drawn by eight horfes, in about fix weeks time carries and
brings back between London and Edinburgh near four ton weight
of goods. In about the fame time a thip navigated by fix or eight
men, and failing between the ports of London and Leith, fre-
quently carries and brings back two hundred ton weight of goods.
Six or eight men, therefore, by the help of water-carriage, can
carry and bring back in the fame time the fame quantity of goods
between London and Edinburgh as fifty broad-wheeled waggons,
attended by a hundred men, and drawn by four hundred horfes,
Upon two hundred tons of goods, therefore, carried by the cheapéft
dibs from London to Edinburgh, there muft be charged
the

country
yood: a

1. The
cer, and
plough-
he latter
: fach'a
‘parts-of
ate of'a
the: yeas,
‘in fach
nd, ‘that

arket is
lone can
of 'navi-
s to fub-
ong’ time
and ‘parts
two men
tries and
mn weight
or eight
ith, fre-
bf goods.
lage, can
of goods
waggons,
d horfes.
e cheapeft
charged
the

THE WEALTH OF NATIO® &

the maintenance of a hundred men for three weeks, and beth ‘he C RA P.
maintenance, and, what is nearly equal to the maintenance, the —\—~

wear and tear of four hundred /horfes: as well as of fifty great
waggons. Whereas upon the fame quantity of goods carried by
water, there is to be charged only the maintenance of ‘fix or eight
men, and the wear and tear of a fhip of two hundred tons burden,
together with the value of the fuperior rifk or the difference of the
infarance between land’and water-carriage. Were there no other
communication between thofe two places, therefore, but by land-
carriage, as no goods could be tranfported from the one to the
other’ except fuch 'whofe:price was very confiderable ‘in proportion
to their ‘weight, they ‘could catry on but a fimall part :of, that,
commerce ‘which is at prefent carried on between them, and con-
fequently could give but a fmall part of that encouragement which
they :at. prefent ‘mutually afford to each other's induftry. There
could be: little or no ‘commerce of -any, kind between the diftant
parts of the-world... What goods could bear the expenceof land.
carriage between London and Calcutta? Or if ‘there was any fo
precious .as to be able to fupport this expence, with what fafety
could they be tran{ported, through the territories of fo many
barbarous:nations? ‘Thole, two: cities, however, at prefent carry
on. together \a very confiderable commerce, ‘and, by mutually
affording a market, give a good deal of encouragement to each
other’s induftry.

Since :fuch, therefore, are the advantages of water -carriage,
it is natural that the firft improvements of art and induftry ‘fhould
be made where this conveniency opens the whole world: for a
market to the produce of every fort of labour, and that they
fhould always be ‘much later in. extending themfelves into the in-
land parts of the country. The inland parts of the country can
for along time ‘have no other market for the greater part-of their

5 goods,

sOoR

THE NATURE AND CAUSES OF

goods, but the country which lies round about them, and feysa-
rates them from the fea coaft, and the great navigable rivers, ‘The
extent of their market, therefore, muft for a long time be: in
Proportion to the riches and populoufnefs of that country, and
confequently their improvement muft always be pofterior to. the
improvement of that country. In our North American colonies
the plantations have conftantly followed either the fea coaft or
the banks of the navigable rivers, and have fcarce any where exe
tended themfelves to any confiderable diftance from both.

Tne nations that, accordmg to the beft authenticated hiftory,
appear to have been firft civilized, were thofe that dwelt round
the coaft of the Mediterranean fea. That fea, by far the greateft
inlet that is known in the world, having no tides, nor confequently
any waves except fuch as are caufed by the wind only, was,) by
the fmoothnefs of its. furface, as well as by the multitude of. its
iflands, and the proximity of its neighbouring: fhores, extreamly
favourable to the infant navigation of the world; when from their
ignorance of the compafs, men were afraid to quit the view of i
the coaft, and from the imperfection of the art of thip-building, a
to abandon themfelves to the boiiterous waves of the ocean, To mi
pafs beyond the pillars of Hercules, that is, to fail out of the a
ftreights of Gibraltar, was, in the antient world, long confidered e |
as a moft wonderful and dangerous exploit of navigation. It was |
late before even the Phenicians and Carthaginians, the moft a |
fkilful navigators’ and fhip-builders of thofe old times, attempted s
it, and they were for a long time the only nations that did at- |
tempt it.

Or all the countries on the coaft of the Mediterranean fea, i
Egypt feems to have been the firft in which either agriculture or 4

manufactures were cultivated and improved to any confiderable
degree.

1 feysa-
, The
> be in
y, and
to the
colonies
oalt or
here CX-

hiftory,:
- round
greateft
quently
was,, by
Je of its
xtreamly
om their
view of
building,
in, To
| of the
ynfidered
It was

e moft
empted
t did at-

ean fea,
Iture or

ifiderable
degree.

THE WEALTH OF NATIONS,

degree, Upper Egypt extends’ itfelf no where above a few miles C Mi

25
AP,

from the Nile, and in Lower Egypt that great river breaks itfelf w--—w

into. many: different canals, which, with the affiftance of a little
art, feem te have afforded a communication by water carriage,
not only between all the great’ towns; but’ between all the cons
fiderable: villages, and even to many’ farm: houfes: in the country ;
neaily/ in) the fame manner as the Rhine and the Macfe do in
Holland: at: prefent.. The extent and eafinefs of this inland
navigation was probably one of the principal caufes of the early
improvement of Egypt.

- ‘Tue improvements in agriculture and manufactures feem
wife to:have been of'very great antiquity in the provirices of Bengal
in the Eatt Indies; and in forme of the: caftern provinces of! China}
though the’ great extent of 'thiv antiquity is not anthenticated by any
hiftories: of-whofe authority we,. ix thie part’ of the'world, are well
affured: In Benga? the'Ganges-and feveral other great rivers‘ break
themfelves into’ many canals in’ the fame mannef as the Nile does
in Egypt.’ In tlie’ efter’ provinces of Chita’ too’ feverat! great
rivets’ ‘form; By” their different‘ branches, a‘ niultitude® of carnal
and by communicating with one another afford an inland naviga:
tion much more extenfive than that either of the Nile or the
Ganges, or perhaps than both of them put together. It is re-
markable that neither the antient Egyptians, nor the Indians, no
the Chinefe, encouraged foreign commerce, but feem all alta
derived their great opulence from this inland navigation. °

; Att the inland parts of Africa, and all that part of Afia which
lies any confiderable way north of the Euxine and Cafpian feas
the ancient Scythia, the modern Tartary and Siberia, feem i
all ages of the world to have been in the fame bad blues and

uncivilized ftate in which we find them at prefent. The fea of

Vout. I.
E Tartary

BOOK Tartary is the frozen ocean which admits of no navigation, and
t——_ though fome of the greateft rivers in the world run through that

THE NATURE AND CAUSES OF

country, they are at too great a diftance from one another to
carry commerce and communication through the greater part of
it. There are in Africa none of thofe great inlets fuch as the
Baltic and Adriatic feas in Europe, the Mediterranean and Eux-
ine feas in both Europe and Afia, and the gulphs of Arabia,
Perfia, India, Bengal and Siam, in Afia, to carry maritime come
merce into the interior parts of that great continent: and the
great rivers of Africa are at too great a diftance from one another
to give occafion to any confiderable inland navigation. The com-
merce befides which any nation can carry on by means of a river
which does not break itfelf into any great number of branches
or canals, and which runs into another territory before it reaches
the fea, can never be very confidérable ; becaufe it is always in the
power of the nations who pofiefs that other territory to obftruct thie
communication between the upper country and the fea. ‘The navi-
gation of the Danube is of very little ufe to the different {tates of
Bavaria, Auftria and Hungary, in comparifon of what, it would
be if any one of ‘them. poffeffed the whole of its courfe. till it falls
into the Black ‘fea. : ;

ion, and
ugh that
other to
part of
h.as the
nd Eux-
Arabia,
me come
and the
another
‘he com-
f a river
branches
it reaches
ys in the
ftruct the
“he navi-
{tates of
it would
ill it falls

THE WEALTH OF NATIONS.

CHAP. IV.

Of the Origin and Ufe of Money.

WwW HEN the divifion of labour has been once thoroughly cH Ap.
eftablifhed, it is but a very fmall part of a man’s wants ~-_,

which the produce of his own labour can fupply. He fupplies the
far greater part of them by exchanging that furplus part of the
produce of ‘his own labour, which is over and above his own con-
fumption; for fuch parts of the produce of other men’s labour as
he has occafion for. Every man thus lives by: exchanging,’ or
becomes in fome meafure’a merchant, and the fociety itfelf grows
to be what is properly a commercial fociety.

Bur when the divifion of labour firft began to’'take place, this
power ‘of exchanging muft frequently have been very much
clogged and embarraffed in its operations. One man, we fhall
fappofe, has more of a certain commodity than ‘he himfelf has
occafion for, while another has lefs. The former confequently
would be: glad to difpofe of, and the latter to purchafe, a part of
this fuperfluity.. But if this latter fhould chance to have nothing
that the former ftands in need of, no exchange can be made
between them. The butcher has more meat in his fhop than he
hin.felf can confume, and the brewer and the baker would each of
them be willing to purchafe a part of it. But they have nothing to
offer in exchange, except the different productions of their refpec
tive trades, and the butcher is already provided with all the bread
and beer which he has immediate occafion for, No exchange can,
in this cafe, be made between them. He cannot be their merchant,
nor they his. cuftomers; and they are all of them thus mutually lefs
ferviceable to one another. In order to avoid the inconveniency

E2 of

BOOK of fuch fituations, every prudent man in every period of fociety, after
—~—~ the firft eftablifhment of the divifion of labour, muft naturally

THE NATURE AND CAUSES OF

have endeavoured to manage his affairs ‘in fuch a manner, as to
have at all times by him, befides the peculiar produce of his own
induftry, a certain quantity of fome one commodity or other, fuch
as he imagined few people would be likely to nie in on
for the. produce of their induftry. . . isl

Many different commodities, it is probable, were fucceflively
both thought of and employed for this purpofe, In the rude
ages of fociety, cattle are faid to have been the common inftru.
ment of commerce; and, though they muft have been a moft in~
convenient one; yet in old times we find things were frequently
valued according to the number of cattle which had been given
in exchange for them, The armour of Diomed, fays Homer,
coft only nine oxen; but that of Glaucus coft a hundred oxen.
Salt is faid to be the common inftrument of commerce and ex-
changes in Abyffinia; a fpecies of fhells in fome parts of the
goaft of India; dried cod at Newfoundland; tobacco in Vir-
ginia; fugar in fome of our Weft India colonies; hides or
drefied leather in fome other countries ; and there is at this day a
village in Scotland where it is not uncommon, I.am told, fora
workman to carry nails inftead of money to the baker’s fhop or
the alehoule.

Iw all countries, however, men feem at laft to have been deters
mined by irrefiftable reafons to give the preference, for this em-
ployment, to metals above every other commodity. Metals
can not only be kept with as little lofs as any other commodity,
fcarce any thing being lefs perifhable than they are, but they

can likewife, without any lofs, be divided into any number of

parts, as by fufion thofe parts can eafily be reunited again; a
quality

ty, after
aturally
r, as to
his own
er, fuch

xchange

eceflively
the rude
q inftru.
moft ine
‘equently
en given
Homer,
ed oxen.
and exe
s of the
in Vire
hides or
his day a
ld, fora
; fhop or

en deters
this em-

Metals
mmodity,
but they

umber of

again; a
quality

THE WEALTH OF NATIONS:

quality which no other equally durable commodities poftefs, and CHAP.
which, more: ¢han any other quality renders them fit to be the w—w

inftrumemts of commerce and ‘circulation. The man who wanted
to buy falt, for example, and had nothing but cattle to give im
exchange for it, muft have been obliged to buy falt to the value of
a whole.ox, jor a whole fheep at a time. He could feldom buy lefs
than tis, becaufe what he was to give for it could feldom be
divided, without lof ;, and if he had a mind to buy more, he muft,
for the fame reafons, have been obliged to buy double or triple
the quantity, the. value, to wit, of two or three oxen, or of
two or three fheep. if, on the contrary, inftead of theep or
oxen, he had metals to give in exchange for it, he could eafily
proportion the quantity of the metal to the precife quantity of
the commodity which he had immediate occafion for.

DirFERENT metals have been made ufe of by different nations
for this purpofe. Iron was the common inftrument of com-
merce. among the antient Spartans; copper among the antient
Romans; and gold and filver among all rich and commercial
nations.

Txose metals feem originally to have been made ufé of for this
purpofe in rude bars without any ftamp or coinage. Thus we
are told by Pliny, upon the authority of one Remeus an antient
author, that, till the time of Servius Tullius, the Romans had
no coined money, but made ufe of unftamped bars of copper to
purchafe whatever they had occafion for. Thefe rude bars, there-
fore, performed at this time the funCtion of money.

Tue ufe of metals in this rude ftate was attended with two
very confiderable inconveniencies; firft, with the trouble of
weighing them ; and, fecondly, with the trouble of aflaying them.

39°

BOOK In the precious metals, where a fmall difference in the quantity
tian makes a great difference in the value, even the bufinefs of weigh-

THE NATURE AND CAUSES OF

ing, with proper exactnefs, requires at leaft very accurate weights
and fcales. The weighing of gold in particular is an operation
of fome nicety. In the coarfer metals, indeed, where a {mall error
would be of little confequence, iefs accuracy would, no doubt,
be neceffary. Yet we fhould find it exceffively troublefome if every
time a poor man had occafion either to buy or fell a farthing’s
worth of goods, he was obliged to weigh the farthing. The ope-
ration of affaying is ftill more difficult, ftill more tedious, and>
unlefs a part of the metal is fairly melted in the crucible, with
proper diffolvents, any conclufion that can be drawn from it, is
extreamly uncertain. Béfore the inftitution: of comed money,
however, unlefs they went through this tedious and difficult ope-
ration, people muft always have been liable to the groffeft frauds
and impofitions, and inftead of a pound weight of pure filver,
or pure copper, might receive, in exchange for their goods, an
adulterated compofition of the coarfeft and cheapeft materials,
which had, however, in their outward appearance, been made to
refemble thofe metals. To prevent fuch abufes, to facilitate ex-
changes, and thereby to encourage all forts of induftry and com-
merce, it has been found neceflary, in all countries that have
made any confiderable advances towards improvement, to affix
a publick ftamp upon certain quantities of fuch particular metals,
as were in thofe countries commonly made ufe of to purchafe
goods. Hence the origin of coined money, and of thofe publick
offices called mints; inftitutions exactly of the fame nature
with thofe of the aulnagers and ftampmafters of woollen ‘and
linen cloth. All of them are equally meant to afcertain, by means
of a publick ftamp, the quantity and uniform goodnefs of thofe
different commodities when brought to market.

Tue

juantity
weighs
weights
peration
all error
» doubt,
if’ every
arthing’s
he ope-
us, and>
le, with
ym it, is
money,
sult ope-
ft frauds
re filver,
oods, an
naterials,
made to
itate ex-
ind com-
hat have
to affix
r metals,
purchafe
e publick
e nature
Ilen ‘and

by means
of thofe

THE

THE WEALTH OF NATIONS.

Tue firft publick ftamps of this kind that were affixed to the C oe
current’ metals, feem in many cafes to have been intended to —\—

afcertain, what it was both moft difficult and moft important to
afcertain, the goodnefs or finenefs of the metal, and to have
refembled the fterling mark which is at prefent affixed to plate
and bars of filver, or the Spanifh mark which is fometimes affixed
to ingots of gold, and which being ftruck only upon one fide of
the piece, and not covering the whole furface, afcertains the fine-
nefs, but not the weight of the metal. Abraham weighs to
Ephron the four hundred fhekels of filver which he had agreed
to pay for the field of Machpelah. They are faid however to
be the current money of the merchant, and yet are received by

"weight and not by tale, in the fame manner as ingots of gold and

bars of filver are at prefent. The revenues of the antient Saxon
kings of England are faid to have been paid, not in money but
in kind, that is, in victuals and provifions of all forts. William
the conqueror introduced the cuftom of paying them in money.
This money, however, was, for a long time, received at the ex-
chequer, by weight and not by tale.

Tue inconveniency and difficulty of weighing thofe metals with
exactnefs gave occafion to the inftitution of coins, of which the
ftamp, covering entirely both fides of the piece and fometimes
the edges too, was fuppofed to afcertain not only the finenefs, but
the weight of the metal. Such coins, therefore, were received
by tale as at prefent, without the trouble of weighing.

Tue denominations of thofe coins feem originally to have
expreffed the weight or quantity of metal contained in them. In
the time of Servius Tullius, who firft coined money at Rome,.
the Roman As or pondo contained a Roman pound of good
copper. It was divided in the fame manner as our Troyes

pound,

32
B “ K
eorngmned

THE NATURE AND CAUSES OF

pound, into twelve ounces, each of which contained a reak ounce
of good copper. The Englith pound fterling, in the time of
Edward I. contained a pound, Tower weight, of filver of a known
finenef*, The Towér pound feems to have been fomething: more
than the Roman pound, and fomething lefs than the Troyes
pound. This laft was. not: introduced into: the mint of Engr
land till the 18th of Henry VIII. ‘The French: livre contained
in the time of Charlemagne a pound; Troyes: weight, of filver
of a known finenefS. ‘The fair of Troyes: in Champaign was
at that time: frequented by all the nations of Europe;; and. the
weights.and meafures of fo famous a market were generally known
and efteemed; The Scots money pound contained, from: the
time of Alexander: the: firft to: that:of Robert: Bruce,.a pound of
filver of the: fame: weight and finenefs: with the: Englifh : pound
fterling; Englith, French and Seots; pennies: too,’ contained. all
of: them originally a, real, pennyweight of filver,, the twentieth
part: of am ounce, and the two~ hundred. and fortieth. part
of-a pound. The. fhilling too feems originally. to: have. been. the
denomination of a weight. When wheat. is-atstwelvefhillings the
quarter, fays an antient ftatute of Henry III. then waftel bread
of a farthing foall weigh eleven foillings and. four pence, The pro-
portion, however, between: the: fhilling and either the. penny on
the one hand, or the pound on the other, feems not. to have been
fo conftant and.uniform as that between the penny and the pound,
During the firft race of the kings of France, the French fou
or fhilling appears upon different, occafions to- have contained
five, twelve, twenty, forty, and forty-eight pennies. Among tlie
antient Saxons. q fhilling appears at one time to have contained
only five pennies, and it is not improbable that it may have been
as variable among them as among their neighbours, the antient
Franks, From the time of Charlemagne among the French, and
from that of William the conqueror among the Englifh, the
proportion between the pound, the fhilling, and the penny, feems
5 to

sak ounce
time of

a known
ing more
e Troyes
of Engr
contained
of filver

aign was
» and, the
ly known
from: the
pound of
fh «pound
tained. all
twentieth
eth. part
+. been. the
billings. the
aftel bread
The pro-

penny on
have been
e pound,

rench fou
contained
Among thie
contained
have been
e antient
ench, and
glifh, the
ny, feems
to

THE WEALTH OF NATIONS.

to have been uniformly the fame as at prefent, though the value © Bye Pe
of each has been very different. For in every country of the PLP

world, I believe, the avarice and injuftice of princes and fovereign
ftates, abufing the confidence of their fubjects, have by degrees
diminifhed the real quantity of metal which had been originally

contained in their coins. The Roman As, in the latter ages of —

the Republick, was reduced to the twenty fourth part of its
original value, and, inftead of weighing a pound, came to weigh
only half an ounce. The Englifh pound and penny contain
at prefent about a third only; the, Scots pound and penny
about a thirty-fixth ; and the French pound and penny about a
fixty-fixth part of their. original value. By means of thofe ope-
rations the princes and fovereign ftates which performed them
were enabled, in appearance, to pay their, debts and to fulfil their
engagements with a fmaller quantity of filver than would otherwite
have been requifite. It was indeed in appearance only ; for their
creditors were really defrauded of a part of what was aue to them.
All other debtors in the ftate were allowed the fame privilege, and
might pay. with the fame nominal fum of the new and debafed coin
whatever they had borrowed in the old. Such operations, there-
fore, have always proved favourable to the debtor, and ruinous
to the creditor, and have fometimes produced a greater and more
univerfal revolution in the fortunes of private perfons, than could
have been occafioned by a very great publick calamity.

Ir is in this manner that moncy has become in all civilized
nations the univerfal inftrument of commerce, by the i intervention

of which goods of all kinds are bought and fold; or exchanged
for one another, Ty

Waar are the rules which men naturally obferve in exchanging

them either for money or for one another, I fhall now proceed

Vout. I. F to

THE NATURE AND CAUSES OF

toexamine, Thefe rules, determine,what may. be;called the, relative
or exchangeable value. of goods.

Tuc word vAugE, it is to be obferved, has two different mean~-
ings, and fometimés ‘expreffes’ the ‘utility of fome ‘particular’ object,
and forhetimes the power of: par chafing othier goods which the’ pof-
feffion of that object conveys. “The one may be called, * value in
“ufe;” the other, ‘* value in exchange.” The things which
have the greateft value in ufe‘have frequently little or ‘no value
in exchange 5 ‘anid, ‘on’ the'tontiary, those! whith’ Have: the' greateft
value: in exchange jiave frequently little or” nd''valud Th Ufe,
Nothing is more ufeful than water: but it will purchafé fcarce:
any thing; fcarce any thing can be had in exchange for it. A
diamond, on the contrary, has f€arce any value in ufe; but a:
very great quantity of other gee may frequently be had in ex--
change for it.

_. In order to inveftigate the, principles which regulate the exchange
able value of commodities, I.fhall endeavour to: fhew,,

First, what is the real’ meafire «this exchangeable: be
er, wherein confifts tlie real’ price of all commodities,

SeconpLy, what are the different parts of which: this real Price:
is compofed or made up..

AND, laftly, wliat are’ the different cdicusathnes- which Gites
times raife fome or all.of thefe different parts of price above,. and!
fometimes fink them below their natural‘ or ordinary rate ;..or,,
what: are the caufes: which fometimes hinder the market: price;
that is, the a€tual, price; of: commodities, from. coinciding: ex+
aétly with what. may. be called. their natural price.

I sHALL endeavour. to explain, as fully and diftinétly. as I oan;,.
thofe. three fubjects in. the three following chapters, for which [
mutt.

he, relative

nt mean=
lar object,.
h the'pof-
¢¢ value in
igs which
no value
he greateft
ein? ufe.
hafe f{carce:
for it. A
fe; but a:
had in ex--

exchange
e: valug:s;
ible we
§ real price:
hich fome-
above,. and!
rate ;..Or,,

tket: price;
ciding: ex+

ly. as I oan;.
for which
mutt.

THE WEALTH OF' NATIONS.

muft very earneftly entredt both ‘the patience "and ‘attention “of the C RAR
reader his patience in order to examine a detail'which may per- --y+—~

haps in fome, places appear unneceflarily tedious; and his attention
in order to underftand what may, perhaps, after the fulleft expli+
cation, which I .am_ capable of giving; of 4 it, appear. fill in.fome
degree obfcure. Iam always willing to run fome hazard of being
tedious in order to be fure that I am perfpicuous and after taking
the utmoft pains.that I can to be pesfpicuous, fome, obfcurity may
ftill appear. to, FERS PRE a sii whist, is in, its ae, nature
extremely, Abfpitede, Hisunet

yt ‘ TY 8b00 ionte Ye rritesy fps tr VQ weg

Of the real and nominal’ Price of Commodities dr ne vee Price
“in Labour,’ and thelr’ Price tn! ‘Money.’ ide

VERY" mari is ian or poor according toithé!degree'i in Which

he can afford to’ enjoy the /néceffaties) cohvenienctes’ aitd
amu‘ments of. human life. , But: after, the, divifion of labour. has
once thoroughly taken place, it is but... very . fall. art, of
thefe with which a man’s own labour can fapply him. The far
greater part of ‘tHein’ he’ muit ‘derive! fromthe labout ofdther
people, and he muft ‘be rich or poor accorsing tothe quantity of

‘that labour ‘which he ‘can’ ¢ommanhdy or which hé: cam afford: to

purchafe.”” The value ‘of any commodity} therefore, to the perfon
who poffefies'it "and who’ rieanynotto ufericonfume'it himéelf,
but to exchange it for othel commodities, i equal tothe quantity
of labour which i it enables him to urchafe or command. Labour,
therefore, is the Teal Aneafure ‘0 nd the exchiangeable’ valid’ of all
commodities. MM AE BINQEAU): Ould Shag

F 2 Tus

36
B a K
ee pen

THE NATURE AND CAUSES OF

Tue real price of-every thing, what every thing really cofts to
the man who wants to acquire it, is the toil and trouble of ac-
quiring it. What every thing is really worth to the man who
has acquired it, and who wants to difpofe of it or exchange it for
fomething elfe, is the toil and trouble which it can fave to him-
felf, and which it can impofe upon. other people. What is bought
with money or with goods is purchafed by labour as much as
what we acquire by the toil of our own body. ‘That money’ or
thofe goods indeed fave us'this toil. They contain. the value: of
a certain quantity of labour which we exchange for what is
fuppofed at the time to contain the value of an equal quantity.
Labour was the firft price, the original purchafe money that was
paid for all things. It was not by gold or by filver, but by
labour, that all the wealth of the world was originally purchafed;
and its value, to thofe who poffefs it and who want to exchange
it for fome new productions, is precifely equal to the quantity of
labour which it can enable them to purchafe or command.

But though labour be the real meafure of the exchangeable
value of all commodities, it is not that by which their’ value is
commonly eftimated. It is often difficult to afcertain the pro-
portion between two different quantities of labour. The time fpent
in two different forts of work will not always alone determine this
proportion. The different degrees of hardfhip endured, and o¢
ingenuity exercifed muft likewife be taken into account. There
may be more labour in an hour’s hard work than in two hours
eafy bufinefs; or in an hour's application to a trade which it coft
ten years labour to learn, than in a month’s induftry at an ordinary:
and obvious employment. But it is not eafy to find any accurate
meafure either of hardfhip or ingenuity. In exchanging indeed the
different productions of different forts of labour for one another,
fome allowance is commonly made for both. It is adjufted, how-

ever,

r cofts to
3 of ace
nan who
nge it for
e to him-
is bought
much as
noney' or
) value. of
: what’ is
quantity.
that was
, but by
urchafed ;
exchange
uantity of
le

hangeable
ir value is

the pro-
time fpent
rmine this
jd, and of
t. There
two hours.
1ich it coft
n ordinary:
y accurate
indeed the
re another,
{ted, how=

ever,

THE WEALTH OF NATIONS,

ever, not’ by’ any accurate meafure, but by the higgling and CHAP.
bargaining of the market, according to that fort of rough equality —\—

which, though not exact, is fufficient for carrying on the bufinefs
of common life,

Every commodity befides, is more frequently exchanged for,
and thereby compared with, other commodities than with labour.
It is more natural, therefore, to eftimate its:exchangeable value by
the.quantity of fome other commodity than by that, of the labour
which it can purchafe. The greater part of people too underftand
better what is meant by a quantity of a particular commodity, than
by a quantity of labour. The.one is a plain palpable object ; the
other an abftract notion, which, though it can be made fufficiently
intelligible, is not altogether fo natural and obvious.

But when, barter ceafes, and money has become the common
inftrument, of .commerce, every particular commodity is more
frequently exchanged for money than for any other commodity.
The butcher feldom carries his beef or his mutton to the haker, or
the brewer, in order to exchange them for bread or for beer ;
but he carries them to the market, where he exchanges them for
money, and, afterwards; exchanges that. money for bread and for
beer. The quantity of money which, he gets. for. them regulates
too the quantity of bread and beer which he can. afterwards pur-
chafe. It is more natural and obvious to. him, therefore, to efti-
mate their value by. the quantity. of money, the commodity for
which he immediately exchanges them, than by that of bread and
beer, the commodities for which he can exchange them only by the
intervention of another commodity; and rather to fay that his
butcher’s meat is worth threepence or fourpence a pound, than
that it is worth three or four pounds of bread, or three ‘i four
quarts of {mall beer. Hience it comes to pals that the exchange-

5 able

THE NATURE AND CAUSES ‘OF

able‘value of every commodity is jnote frequently eftimated’ by ithe
quantity of money, than by the quantity either of labour or of any
other commodity which can be had in exchange for mo 7

Gotp and filver, however, like every other soxninoity; vary’ in
their value, are fometimes cheaper and fometimes dearer, fometimes
of eafier and fometimes of more difficult purchafe. ‘The quantity
of labour which.any particular quantity of them can purchafe or
command, or the quantity of other goods which it will exchange
for, depends ‘always upon the:'fertility or barrennefs of the mines
avhich happen ‘to be known about the time when’ fuch exchanges
are made, The: difcovery of. the abundant mines. of America
vediiced, ‘in the fixteenth century, the value of gold and filver'in
Europe: to-about'/a third’of what it fad been ‘before. | Ae it coft
Iefs labour to bring thofe metals from the mine to the market, ‘fo
avhen they were brought there they could purchafe or command
lefs: labours’ and this revolution in their value, though perhaps the
greateft, |is: by no means) the only one of which hiftory gives’ fome
account?’ "But ‘ae @! ineafure of quantity, fuch as the tatural’ foot,
fathom, or handful, ‘which is continually varying in’its own quan
tity; can never be an accurate meafure of the quantity of othet
things; fo a commodity which is itfelf continually varying iit its
‘own value, can never be an-accurate meafure of the value of other
commodities. Equal quantities of labour muft at all times and places
be of equal value to ‘the labourer. ‘He muft always lay down the
fame portion of his eafe, his liberty, and his happimefs. ' ‘The price
which he pays mutt always be the fame, whatever may be the quan+
tity of goods which he' receives in return for it. Of thefe, indeed! it
may fometimes parchafe a greater and fometimes a {maller quantity ;
but it is their value'which varies, not that of the labour which put
chafes them: At all times and places that is dear which it is difficult
to come at, or which it cofts much labour to acquire ; attd that.cheap

e. which

THE WEALTH, OF NATIONS. 39

d by the whichis to be had ¢afily,..or.with very: little labour. Labour alone © HA P,
or of any Me therefore, never varying. in its own value, .is alone the ultimate and ——
BORIS Se au real ftandard by which the value of all commodities can at all times
vical page a and places be eftimated and compared, It is their real price; money
j very’ in a is their nominal price-onlys.y3/9 94 yy yor! |
ometimes a brat 16 erent
} quantity qf } . Bur though equal quantities of labour are always of equal
rehafe or om value to, the labourer, yet tothe perfon who, employs him: they
exchange if appear, fometimes, to be of greater. and. fometimes of: fmaller
the mines 4 value, »Ele: purchafes them: fometimes with a greater and: fome-
exchanges a times. with a fmaller quantity of goods, and to him. the price of
America i labour ‘feems: to -vary:like that. of all.other things. | It appears to
1 filver'in 7 —hhimedear in the one cafe, and cheap in. the other, In reality,
Aé it oft A however, itis the goods, which. are cheap.in the one. cafe, and
narket, {6 dear in the other.. Biche
command 7 ss
trhaps the i . In. this popular feng, therefore, Labour; . like. commodities;
tives’ fome Vi may, be faid to have a real and a nominal priees;, Its real price may
tiral foot, ee be faid to confift in the quantity of the neceflaries and.conveniencies -
wn quan 7 of life which are. given: for jit; its:-nominal price,:.in the quantity
r of othét By, of money, The labourer.is rich or poor, is: well or ill rewarded,
ing it its in proportion to the, real, not.to the nominal, price. of his. labour,
e of other Y otf ae : ley swe
and places ‘Eur diftinction between the real and the:nominal price, of. coms
down the modities and labour, is. not a matter of. mere fpeculation, but may
The price fometimes be of confiderable ufein practice, The fame. real price is
the quans always. of the fame value ;: but on account of the variations in the
‘ihideed:vit value of gold and filver,, the fame nominal. price is.fometimes of
“quantity ; very different: values. When a. landed eftate,, therefore, is fold
vhich putt with a refervation of a perpetual rent, if.it is intended: that this
“is difficult rent fhould always be of the fame value, it is of importance to the
that.cheap family in whofe. favour it is. referved, that it fhovld not confit in
which a particular.

THE NATURE AND CAUSES OF

a particular fum of money. Its value would in this cafe be liable
to variations of two different kinds ; firft, to thofe which arife from
the different quantities of gold and filver which are contained at
different times in coin of the fame denomination ; and, fecondly,
to thofe which arife from the different values of equal quantities
of gold and filver at different times.

Princes and fovereign ftates have frequently fancied that. they
had a temporary intereft to diminifh the quantity of pure metal
contained in their coins; but they feldom have fancied that they
had any to augment it. The quantity of metal contained in the
coins, I believe, of all nations has, accordingly, been almoft con-
tinually diminifhing, and hardly ever augmenting. Such variations
therefore tend almoft always to diminifh the value of a money rent.

Tue difcovery of the mines of America diminifhed the value
of gold and filver in Europe. This diminution, it is commonly
fuppofed, though, I apprehend, without any certain proof, is ftill
going on gradually, and is likely to continue fo do fo for a long
time. Upon this fuppofition, therefore, fuch variations are more
likely to diminifh, than to augment the value of a money rent,
even though it fhould be ftipulated to be paid, not in fuch a
quantity of coined moncy of fuch a denomination, (in fo many
pounds fterling, for example) but in fo many ounces either of
pure filver, or of filver of a certain ftandard.

Tue rents which have been referved in corn have preferved their
value much better than thofe which have been referved in money,
even where the denomination of the coin has not been altered.
By the 18th of Elizabeth it was enacted, That a third of the rent
of all college leafes fhould be referved in corn, to be paid, cither
in kind, or according to the current prices at the neareft publick

market.

Age
+
Ps
ae
a
Bess

liable
from
ed at
ondly,
antities

t. they
metal
9 they
in the
ft con-
lations
. rent,

> value
mmonly
is ftill
along
e€ more
y rent,
fuch a
) many
ther of

ed their
money,
altered.
he rent
, either
publick
narket.

THE WEALTH* OF ‘NATIONS,

maiket’ “The Money arifing from this cern rent, though originally
but ‘a ‘third’“6f the: whole; is inthe prefent times, according to
Doétor “Blackftone, commonly near double’ of what arifes from
the ‘other two-thirds; ' The old money rents of colleges mutt;
according to this ‘account, have funk almoft to a fourth part of
their antient value; or are worth little more than a fourth part
of the corn which they were formerly worth. But fince the reign
of Philip and Mary the denomination ‘of the Englifh coin has
undergone little or no alteration, and the fame number of pounds,
fillings and pence, have contained very nearly the fame quantity
of pure filver. This degradation, therefore, in the value of the
money rents of colleges, has arifen altogether from the degradation
in the value of filver. ” ‘

Wuen the degradation in the value of filver is combined with
the diminution of the quantity of it contained in the coin of
the fame, denomination, ,the lofs is frequently {till greater. In
Scotland, where the denomination of the coin has undergone much
greater ,alterations than it ever did in England, and in France,
where it has undergone {till greater thanjit ever did in. Scotland,
fome antient rents, originally. of confiderable value, have in this
manner been reduced almoft to nothing.

Equa quantities of labour will at diftant times be purchafed
more nearly with equal quantities of corn, the fubfiftence of the
labourer, than with equal quantities of gold and filver, or perhaps
of any other commodity. Equal quantities of corn, therefore,
will, at diftant times, be more nearly of the fame real value, or
enable the poffeffor to purchafe or command more nearly the fame
quantity of the labour of other people, They will do this, I fay,
more nearly than equal quantities of almoft any other commodity ;
for even equal quantities of corn will not do it exactly. The fub-
fiftence of the labourer, or the real price of labour, as I thall

Vou. I. G endeavour

4I
CHAP.
Vv.
eyed

THE NATURE AND CAUSES OF

endeavour to fhow hereafter, is very different upon different occa~
fions; more liberal in a fociety advancing to opulence than in
one that is ftanding ftill; and in one that is ftanding ftill than
in one that is going backwards. Every other commodity, how~
ever, will at any particular time purchafe a greater or fmaller
quantity of labour in proportion to the quantity of fubfiftence
which it can purchafe at that time. A rent therefore referved in
corn is liable only to the variations in the quantity of labour
which a certain quantity of corn can purchafe. But a rent referved
in any other commodity is liable, not only to the variations in
the quantity of labour which any particular quantity of corn can
purchafe, but to the variations in the quantity of corn which can
be purchafed by any particular quantity of that commodity.

TuouGu the real value of a corn rent, it is to be obferved
however, varies much lefs from century to century than that of 2
money rent, it varies much more from year to year. The money
price of labour, as I fhall endeavour to fhow hereafter, does nor
fluétuate from year to year with the money price of corn, but
feems to be every where accommodated, not to the temporary or
occafional, but to the average or ordinary price of that neceflary of
life. The average or ordinary price of corn again is regulated, as I
fhall likewife endeavour to fhow hereafter, by the value of filver, by
the richnefs or barrennefs of the mines which fupply the markee
with that metal, or by the quantity of labour which muft be em-
ployed, and confequently of corn which muft be confumed, in
order to bring any particular quantity of it from the mine to the
market. But the value of filver, though it fometimes varies
greatly from century to century, feldom varies much from year to
year, but frequently continues the fame or very nearly the fame
tor half a century or a century together. The ordinary or average
money price of carn, therefore, may, during fo long a period,

continue

ieee

it occas
than in
li than
» how~
fmaller
fiftence
ved in
labour
referved
ions in
mn can
ich can

»bferved
hat of 2
; mone.
loes not
mn, but
rary or
{lary of
ed, as I
lver, by
market
be em-
ned, in
> to the
} varies
year to
he fame
average
period,
ontinue

THE WEALTH OF NATIONS.

continue the fame or very nearly the fame too, and along with C HA P.
it the money price of labour, provided, at leaft, the fociety con- hd

tinues, in other refpeéts, in tae fame or neatly in the fame condition.
In the mean time the temporary and occafional price of corn,
may frequently be double, one year, of what it had been the
year before, or fluctuate from five and twenty to fifty fhiltings
the quarter, for example. But when corn is at the latter price,
not only the nominal, but the real value of a corn rent will be
double of what it is when at the former, or will command double
the quantity either of labour or of the greater part of other
commodities ; the money price of labour, and along with it that
of moft other things, continuing the fame during all thefe fluc-
tuations. |

Lasour, therefore, it appears evidently, is the ory univerfal,
as well as the only accurate meafure of value, or the on ftandard
by which we can compare the values of different co: modities
at all times and at all places. We cannot eftimate, it is allowed,
the real value of different commodities from century to century
by the quantities of filver which were given for them. We catinet
eftimate it from year to year by the quantities of corn. By
the quantities of labour we can, with the greateft accuracy, efti-
mate it both from century to century and from year to year,
From century to century, corn is a better meafirre than filver,
becaufe, from century to century, equal quantities of cam will
command the fame quantity of labour more nearly thaa equal
quantities of filver. rom year toyear, on the contrary, filver is
a better meafure than ‘corn, becaufe equal quantities of it win
more nearly command the fame quantity of labour.

BuT though in eftablifhing perpetual rents, or even in letting
very one leafes, it may be of ufe to diftinguith between real and
G2 nominal

THE NATURE AND CAUSES OF

nominal prices it is of none in buying and felling, the more
common and ordinary tranfactions of human ie

Ar the fame time and place the real and the odie price of'
all commodities! :arebexactly in iproportion: to one another.. The
more or lefs money you iget)for:any commodity, in the London:
market, ‘for example; :the more or:lefs labour» it. will at that time
and. place ‘-enable:you to.;purehafe/,or:cominaad.; At; tke fame
time and placa therefores:money tis: the: exact). meafure..of .the
real exchangeable value of all commodities. It is fo, however, at
the Donate and; sethas only.isvowod yids es auow 8s sou ve
te Yubomimos istyomtsq-a to eoulsy It 94 [0

oTHeveR lat: -dfeatt Iptacés}> ahenw is: no; pen iecpeatbty
between? the ores band they money! price sof: :combadities, -yet the
mercharit -whs'catrié: goods from, thel one to the:otherchas nothing.
to céiifiderBut=their monpy: price; orsthe difference: between, tha
quantity of filver fori which ‘he buys them;::and that ‘for:which he
is ikely, to @llsthem(, ovMalE! ancounce! ofo filver’ at.Canton:itChina.
may coiirhatnd aogrégtey: quantity both) of: labour ahdvof the necefs
fariea ‘and eonvententies of :lifép.than anounce at; London. A.
commiadity, *therefore?whicl fells fors:haix an, ounce of? filver at
Canton nay there be! really dearer,, of: more’ real: importance: :to
the mati Who# poflefts it: theve, thdn one:which fells! for. an: outics
at London'to: the mas who <pofléffes itat London. df; aiLondon.
inerchant, howéver, can:‘buy | at) Canton: for: half) an counce. of
filver, a. commodity which: he-cam afterwards: ll; at. London: for
an ounee, +he gains:a hundred per cent by.the bargain juft.as. much
as if an ounce of filver was. at London exattly of the fame valug as
at Canton. It is.of. no importance to him that: haif. an ounce of
filver at Canton would have given him the command of more.
labour and of a. greater quantity of. the: neceflaries and conve-
niencies of life than an ounce can do. at London,. An. ounce at
London.

ie more

price of
.. The
London:
nat time
e fame
Of .the

ever, ah

mh ourics
London.
Ince of
don: for
s.much
ralug as
unce of
f more.
conve-
unce at
London,

THE WEALTH OF NATIONS

London will always give him the command of double the quantity C HA P,
ef all thefe: which half an. ounce could. have done. there, and this w-+s—_

is precifely what he wants.

’ As:it is the nominal: or money price of goods, therefore, which
finally: determines the prudence or imprudence of afl purchafes and
fales, and: thereby regulates aimoft the whole bufinefs of ~oraron
life in which: price is.coneerned, we cannot wonder that it. sould
have been fo much more attended to than the. real price.

In fuch a work as this, however, it may fometimes be of ufé .

to compare the different real values of a particular commodity. at
different times. and. places, or the different degrees of power over
the labour of other people-which it may, upon different occafions;
have given ta thafe who. poffeffed.it. We muft in. this: cafe: com-
pare, not fo:much the different quantities of filver for which it
was. commonly fold, as the: different quantities: of labour which

thofe different quantities of filver. could have purchafed. But the.

current. prices. of labaur at diftant times and places. can fcarce ever
be known with any degree of exactnefs,. Thofe of corn, thorgh
they have in few place: been regularly recorded, are in general
better known: and. have:-been: more: frequently taken notice of by
hiftorians and. other writers. We muft generally, therefore, con=
tent ourfelves with them, not as. being: always exactly in the fame
proportion as.the current prices of labour; but as being the neareft
approximation which can: commonly be had to that proportion,
I fhall hereafter. have eccafion:to make feveral comparifons of* thig
kindi

In the progrefs: of induftry, commercial’ nations have found’ it

convenient tq coin feveral different metals into money ; gold for

larger payments, filver. for purchafes of moderate-value, and copper
or

BOOK of fome other coarle metal, for thofe of fill fmaller confideration,

THE NATURE AND ‘CAUSES OF

eames They have always, ‘however, confidsred one of thofe metals as

more peculiarly the meafure of value than'any of the other two;
and this preference feems generally to have been given to the metal
which they happened firft. to::make.ufe of as the inftrument of
commerce, Having once begun to ufe itias their ftandard, which they
muft have done when they had no, other money, they have gene-
rally continued. to. do.fo even. when the neceflaty was not the fame.

Tue Romans are, faid to have:had nothing but coppe: money
till withia five yeats before the fir ‘Panic war, when they firtt
began to coin filvery Copper; therefore, appears) to: ave cons
tinued always the meafure of value in: tat republick.' At Rome
all accauats appear to: have been kept, ‘and the value of ‘all’ eftates
to have been computed ‘either in fev or in Seterni.> Fhe ae
was always the denomination of a copper coin. “The word So
tertivs fignifics two Aes and a’ half. Though ‘the’ Seferrins,
therefore, was always a filver coin, its value was eftimated in
coppers At Rome, one who owedl a great deal of sti was
faid to have a great deal of oubihe people’s copper.

Tas northern nations. who eftablithed: themfelves upon the ruins
of the Roman empire, :feem to have had filver money from the firft
beginning of their {ettlements, and net to have known either gold
or copper coins for feveral ages thereafter. There were filver coins
in England in the time of the, Saxons; but there was little gold
coined till the time of Edward HI. mor any copper till that of
James I. of Great Britain. In England, therefore, and for the
fame reafon, I believe, in all other modern nations of Europe,
all accounts are kept and the value of all goods and of all eftates
is generally computed in filver: and when we mean to exprefs
the amount of a perfon’s fortune, we feldom mention the number

5 of

e :
oi
he

‘i

\deration,
metals a9
her two;
he metal
iment of
hich they
Ave gene~
e fame:

e. money
they firtt
ave cons
At Rome
ld eftates
The ah
rord «Sof
Soffer tins,
mated in
ney, was

the ruins
n the firft
ther gold
ver coins
ittle gold
1 that of
| for the
Europe,
ull eftates
o expres
- number

THE WEALTH OF NATIONS.

of guineas, but the number of pounds which we fuppofe would CH LAP.

be given for it,

Iu alt susbien I believe, a legal tender of payment could
originally be made im the coin of that metal only which was pecu-
liarly confidered as the fandard or meafure of value, In England
gold:was net confidered as .a legal tender for a lang time after it
was: coimed inta money.. The propertion between’ the values of
gold and filver money was not fixed by any publick law or pro-
elamationis bit: was left.to be fertled by the market, If a debtor
offered payment in gold, the creditor might either rejagt fiach pay-
ment altogether, oraccept of it at facie q valyatior of the gyid
as he aud his: debtor couldiagpee'upc ay Copper'k .ot at prefent
a legal '\tender, iexcept inthe; change of: the: fmaer filver coins.
In this ftate of ‘things the diftindtion between the:metad: which was
the ftand-4' and that which: was; not the ftandasd,. was nating
more than ry sib erat yt HMI © |
| In men of time, ends sat sidate sinatiih wr odbiilinen more familiar
with the ufe of the-different/metals its. coin, and:confequently better
acquainted with the proportion between their refpective values,
it has, in moft countries Ibelievé, heen found! convenient to:after-
tain this proportion, and} to:declare by a‘publick taw that a guinea,
for example, of fach: a weight ‘and finenol; fhould exchange for
one and twenty’ fhillings, or be ‘a legal ‘tender/fer a debt of that
fum. In this ftate‘of-things, and’ during the. continuance ‘of any’
one reg» lated proportion ‘of this’ kind; the diftinGtion «between the
metal which is the ftandard and that which is not the ftandard,
becomes little more than a nominal diftinétion.

in confequence of any change, however, in this regulated propor-
tion, this diftinétion becomes, or at lealt feems to become, fomething
more

BOOK more than nominal again. If the regulated value of a guinea,
i——~_ for example, was either reduced to twenty, or raifed to two

THE NATURE AND CAUSES OF

and twenty fhillings, all accounts being kept and almoft all obli-
gations for debt being expreffed in filver money, the greater part
of payments could in either cafe be made with the fame quantity
of filver. money: as before 5 but would require very different quan-
tities of gold money; a greater in the one.cafe, and.a {mailer in
the other. Silver would appear to be more invariable in its value
than gold. Silver would appear to meafure the value of gold, and
gold would not appear to meafure the-value of filver. The valuc
of gold would feem to depend upon the quantity of filver which:
it would exchange for; and the value of filver would not fecm
to depend upon the quantity of gold which it would exchange
for, This difference. however would be altogether owing to the
eultom of keeping accounts and of expreffing the amount of all
great and fmall.fums rather in filver than in gold money. One
of Mr. Drummond’s notes for five and twenty or fifty guineas
would, after an alteration of this kind, be ftill payable with five
and twenty or fifty guineas in the fame manner as before. It
would, after fuch an alteration, be payable with the fame quan-
tity of gold:as before, but with very different. quantities of filver.
In the payment of fuch a note, gold would appear to be more
invariable in its value than filver. Gold would appear to mea-
fure the value of filver, and filver would not appear to meafure
the value of gold. If the cuftom of keeping accounts, and of
expreffing promiffory notes .and other obligations for money in
this manner, fhould ever become general, gold, and not filver,
would be confidered as the metal which was peculiarly the ftandard

or meafure of value,

In reality; during the continuance of any one regulated pro-
portion between the refpective values of the different metals in
coin,

}

1 guinea,
| to two
all obli-
ater part
quantity
mt quan-
mailer in
its value
gold, and
"he value
er which:
not fecm
exchange
1g to the
int of all
py. One
y guineas
with five
fore. It
ne quan-
of filver.
be more
to mea-
) meafure
» ana of
Noney in
ot filver,
ftandard

ated pro-
metals in
coin,

THE WEALTH OF NATIONS:

coirt, the ‘value ‘of the moft precious metal regulates the value CHAP.
of the whole: coitt, ‘Twelve copper pence contain half a pound, u=y-—

avoitdupbis, of copper, of net the beft quality, which, before

it’ is’ coiied): is" feldom'worth’ fevenperite” in’ filver. \ But’ as by .
the veputation tweélve'fich ‘pence ate ordered ‘to exchange for a:

fhilling, they’ are'ih ‘the “tharket conifidered'as Worthi'a fhiffing,
atid a fhilling cari’ at“dtty ‘time be had ‘for them, Even before the
late feformation' of the gold Coin’ of “Great' Britain; the gold, that
part®ofitdat leat whith diveulited inondon ‘arid #ts neigiour-
hobds’ wat in “Yeneral “lefe’ degraded’ below ‘its ftandard weight
than“the’ greater partiof the filver: One and twenty: worn and
defaved * fhillitigs, ‘however, ‘were: confidered: as equivalent to a
gulitea,: which perhaps;" indeed; was (worn! and! ‘defaced too,):but
feldértt! (4'ttrach! “6. she fate! regulations Have brotight:thée gold

col 48 rid perhaps to its ‘fandard weight'as it is:poflible'to bring :

the!eurrant'coiW'of any nations and the ‘order, tovreceive ‘no
goldtut'tha publick offices but: by: weight, is’ lileby to prefetve it fo

ad long#!as thatopder isenforced. : ‘The filveredin Mill-¢ontinues

in ‘the fame! worntand degruded’ftate'as*before the! reformation of

the'gold ‘coin. ° In ‘the’ market, however; ‘ott and ¢wehty fhillings:
of this degraded ‘filver coity’ are “till! confidered: as worth a guinea

of this excellerit gold coins’ 9 3 "I 96

r) a ‘ ‘
AVR BAT SudbY at cu side: ues

Tir reformation of the #old coitt’ has'evidehitly'raifed'the Value’

of the filver coin’ which can be exchanged for it, |’

In the Englifh mint a‘pound weight of gold is coined nto‘fortys
four guimeas anda: Half, which at! oie amid’ twenty Millings the
Buinea, is equat to forty-fix pounds: fourteen fhitfligy-and’ fixpence,
An ounce of fuch gold coin, therefore, is worth 3/, 178. 104.4
in filver. In England no duty or feignorage is” paid upon the
coinage, and-he who’ carries: a pound weight or ari ounce weight of

Vou. I, ftandard

50 THE NATURE AND CAUSES, OF

B a9 K ftandard gold bullion tothe mint, gets back a pound weight, or

f= an ounce weight of gold in coin, without any deduction. . Three
pounds feventcen fhillings and ten-pence halfpenny an ounce,
therefore, is faid to be the mint price of gold in England, or
the quantity of gold coin which the mint gives in. return for
ftandard gold bullion.

Berorz the reformation of the gold coin, the price of ftandard
gold bullion in the market had for many years been upwards of
3/. 18s. fometimes 3/. 19s. and very frequently 4/. an ounce;
that fum itis probable, in the worn and degraded gold coin, feldom
containing more than an ounce of ftandard gold. Since the reform-
ation of the gold coin, the market price of ftandard gold bullion
feldom exceeds 3/.'175. 7d. an ounce, Before the reformation
of the gold coin the market price was always more or lefs above
the mint price. Since that reformation the market price has
been conftantly below the mint price. But that market price
is the fame whether it is paid in gold or in filver coin. The late
reformation of the gold coin, therefore, has raifed not only the
‘value of the gold coin, but likewife that of the filver coin in pro-
portion to gold bullion, and probably too in proportion to all other
commodities; though the price of the greater part of other com-
modities being influenced by fo many other caufes, the rife in the
value either of gold or filver coin in proportion to them, may not
be fo diftinét and fenfible.

In the Englifh mint a pound weight of ftandard filver bullion
is coined into fixty-two fhillings, containing, in the fame manner,
a pound weight of ftandard filver. Five fhillings and two-pence
an ounce, therefore, is faid to be the mint price of filver in
England, or the quantity of filver coin which the mint gives in
return for ftandard filver bullion. Before the reformation of the
gold coin, the market price of ftandard filver bullion was, upon

different

eight, or
- Three

ounce,
gland, or
‘feturn for

F ftandard
pwards of
Nn ounce;
n, feldom
le reform-
ld bullion
formation
lefs above
price has
rket price
The late
t only the
in in pro-
o all other
ther come
rife in the
, may not

er bullion
e manner,
two- pence

filver in
it gives in
ion of the
vas, upon

different

THE WEALTH OF NATIONS. gt

different occafions, five fhillings and four-pence, ‘five fhillings and © HAP.
five-pence, five fhillings and fixpence, five fhillings and feven- G-y—y
pence, and very often five fhillings and eight-pence an ounce.

Five fhillings and feven-pence, however, feems to have been the

moft common price. Since the reformation of the gold coin, the

market price of ftandard filver bullion has fallen occafionally to

five fhillings and three-pence, five fhillings and four-pence, and

five fhillings and five-pence.an ounce, which laft price it has fcarce

ever exceeded. -Though the market price of filver bullion has

fallen confiderably fince the reformation of the gold coin, it has

not fallen fo low as the mint price.

In the proportion between the different metals in the Englith
coin, as copper is rated very much above its real value, fo. filver
is rated fomewhat below it. In the market of Europe, in the
French coin and in the Dutch coin, an ounce of fine gold ex-
changes for about fourteen ounces of fine filver, In the Englifh
coin, it exchanges for about fifteen ounces, that is, for more filver
than it is worth according to the .ommon eftimation of Europe.
But as the price of copper in bars is not, even in England, raifed
by the high price of copper in Englith coin, fo the price of filver
in bullion is not funk by the low rate of filver in Englith coin.
Silver in bullion ftill preferves its proper proportion to gold; fo1

the fame reafon that copper in bars preferves its proper proportion
to filver,

Upon the reformation of ‘the filver coin in the reign of William

II. the price of filver bullion ftill continued to be fomewhat above

the mint price. Mr. Locke imputed this high price to the per=
miffion of exporting filver bullion, and to the prohibition of ex-
porting’ filver coin. This permiffion of exporting, he faid,
rendered the demand for filver bullion greater than the demand

H2 for

THE NATURE AND CAUSES OF

BOOK for filver coin. But the number of people who want filver coin
t—y—~ for the common ufes of buying and felling at home, is furely

much greater than that of thofe who want filver bullion either for
the ufe of exportation or for any other ufe. There fubfifts at pre-
fent a like permiffion of exporting gold bullion and a like prohibi~
tion of exporting gold coin; and yet the price of gold bullion
has fallen below the mint price. But in the Englifh coin filver
was then, in the fame manner as now, under-rated in proportion
to gold; and the gold coin (which at that time too was not fup-
pofed to require any reformation) regulated then, as well as now,
the real value of the whole coin. As the reformation of the
filver coin did not then reduce the price of filver bullion to the
mint price, it is not very probable that a like reformation will do
fo now.

Were the filver coin brought back as near to its ftandard
weight as the gold, a guinea, it is probable, would, according
to the prefent proportion, exchange for more filver in coin than
it would purchafe in bullion. The filver coin containing its
full ftandard weight, there would in this cafe be a profit in
melting it down, in order, firft, to fell the bullion for gold coin,
and afterwards to exchange this gold coin for filver coin to be
melted down in the fame manner. Some alteration in the prefent
proportion feems to be the only method of preventing this incon-
veniency.

Tue inconveniency perhaps would be lefs if filver was rated in
the coin as much above its proper proportion to gold as it is at
prefent rated below it; provided it was at the fame time enacted
that filver fhould not be a legal tender for more than the change
of a guinea; in the fame manner as copper is not a legal tender
for more than the change of a fhilling. No creditor could in

filver coin

is furely
either for
ts at pre-
e prohibi-~
ld bullion
coin filver
roportion
} not fup-
ll as now,
mn of the
on to the
on will do

} ftandard
according
coin than
aining its
profit in
gold coin,
cin to be
he prefent
his incon.

as rated in
as it is at
ne enacted
he change
pal tender

could in
this

THE WEALTH OF NATIONS. $3

this cafe be cheated in confequence of the high valuation of filver © HAP.
in coin; as no creditor can at prefent be cheated in. confequence of -—v—
the high valuation of copper. The bankers only would Suffer, by

TH this regulation. When a run comes upon them they fometimes

“7 endeavour to gain time by paying in fixpences, and they would be
precluded by this regulation from this difcreditable method of evad-

ing immediate payment, They would be obliged in confequence

to keep at all times in their coffers a greater «,.antity of cafh than.

at prefent; and though this might no doubt /e a confiderable in-

7 —sconveniency to them, it would at. the. fame time.be.a confiderable

7 — fecurity to their creditors..

a Turee pounds. feventeen fhillings and’ ten-pence halfpenny —
‘ (the mint price of gold) ceriainly does not vontain, even. in our
7) prefent excellent gold coin, more than an o\siice of ftandard gold, .
1 and it may be thought, therefore, fhould not purchafe more ftan-
“7 dard bullion,. But gold in coin. is swore convenient than gold in:
" bullion, and though, in England, the coinage is free, yet the:
/) gold which is carried in bullion to the mint, can feldom be:
returned in coin to the owner till after a delay.of feveral weeks,
In the prefent hurry of the mint, it could not be returned till after
a delay of feveral months. This delay is equivalent to a fmall
duty, and renders gold in coin fomewhat more valuable:than an
equal quantity of gold in bullion. If in the Englith coin filver
was rated according to its proper proportion to gold, the price of
filver bullion would probably fall below the mint price even without
any reformation of tlic filver coin; the value even of the prefent :
worn and defaced filver coin being regulated by the value of the:
excellent gold coin for which it can be changed.

A sMALL feignorage or duty upon the coinage of both gold and '
filver would probably increafe. ftill more the fuperiority of thofe
metals .

THE NATURE AND CAUSES OF

BOOK metals. in coin above an equal quantity of either of them in bul-
—+— lion. The coinage would in this cafe increafe the value of the

metal coined in proportion to the extent of this fmall duty; for the
fame reafon that the fafhion increafes the value of plate in propor-
tion to the price of that fafhion, The fuperiority of coin above
bullion would prevent the melting down of the coin, and would
difcourage its exportation. If upon any publick exigency it fhould
become neceflary to export the coin, the greater part of it would
foon return again of its own accord. Abroad it could fell only for
its weight in bullion. At home it would buy more than that
weight. There would be a profit, therefore, in bringing it home
again. In France a feignorage of about eight per cent. is im-
pofed upon the coinage, and the French coin, when exported, is
faid to return home again of its own accord.

Tue occafional fluctuations in the market price of gold and
filver bullion arife from the fame caufes as the like fluctuations in
that of all other commodities. The frequent lofs of thofe metals

from various accidents by fea and by land, the continual wafte of
them in gilding and plating, in lace and embroidery, in the tear
and wear of coin, and in the tear and wear of plate; require, in
all countries which poffefs no mines of their own, a continual
importation in order to repair this lofs and this wafte. The mer-
chant importers, like all other merchants, we may believe, endea-
vour, 2s well as they can, to fuit their occafional importations to
what, they judge, is likely to be the immediate demand. With
all their attention, however, they fometimes over-do the bufinefs,
and fometimes under-do it. When they import more bullion than
is wanted, rather than incur the rifk and trouble of exporting it
again, they are fometimes willing to fell a part of it for fomething
lefs than the ordinary or average price. When, on the other hand,
they import lefs than is wanted, they get fomething more than this

price,

min bul-
ue of the
y 3 for the
n propor-
coin above
ind would
y it fhould
f it would
Il only for
than that
ng it home
nt. is im-
xported, is

f gold and
tuations in
hofe metals
al watte of
in the tear
require, in
A continual
The mer-
pve, endea-
pbrtations to
' d. With
e bufinefs,
ulion than
xporting it
fomething
other hand,
e than this
price.

THE WEALTH OF NATIONS.

together fteadily and conftantly, either more or lefs above, or more
or lefs below the mint prices; we may be affured that this fteady
and conftant, either fuperiority or inferiority of price, is the effeét
of fomething in the ftate of the coin, which, at that time, renders
a certain quantity of coin either of more value or of lefs value
than the precife quantity of bullion which it ought to contain.
The conftancy and fteadinefs of the effect, fuppofes a propor-
- tionable conftancy and fteadinefs in the caufe.

Tue money of any particular country is, at any particular time
and place, more or lefs an accurate meafure of value according as
the current coin is more or lefs exactly agreeable to its ftandard, or

_ pure filver which it ought to conta. If in England, for example,
| forty-four guineas and a half contained exactly a pound weight
of ftandard gold, or eleven ounces of fine gold and one ounce of
alloy, the gold coin of England would be as accurate a meafure of
the actual value of goods at any particular time and place as the
nature of the thing would admit. But if, by rubbing and wearing,
forty-four guineas and a half generally contain lefs than a pound
weight of ftandard gold; the diminution, however, being greater
in fome pieces than in others; the meafure of value comes to be
liable to the fame fort of uncertainty to which all other weights
and meafures are commonly expofed. As it rarely happens that
thefe are exactly agreeable to their ftandard, the merchant adjufts
the price of his goods, as well as he can, not to what thofe weights
and meafures ought to be, but to what, upon an average, he
finds by experience, they actually are. In confequence of a like
diforder in the coin, the price of goods comes, in the fame manner,
to be edjufted, not to the quantity of pure gold or filver which the

col,

price. But when, under all thofe occafional fluétuations, the mar- CHAP.
ket price either of gold or filver bullion continues for feveral years “=~ =

contains more or lefs exaétly the precife quantity of pure gold or.

See ———
See

THE NATURE AND CAUSES’ OF

BOO 2 ‘cola otght to contain, but to that which, upon ‘an atetage, “it
oe is found by experience, it actually does contain.

By the money price of goods, it is to be obferved, I underftand
always the quantity of pure gold or filver for which they are fold,
without any regard to the denomination of the coin. Six fhillings
and eight-pence, for example, in the time of Edward I. I confider
as the fame money price with a pound fterling in the prefent times;
becaufe it contained as’ nearly as we can judge the fame quantity of

pure filver,

CHAP. VI.

Of the component Parts of the Price of Commodities, )

N that early and rude ftate of fociety which preceeds both, the

accumulation of ftock and the appropriation of land, the pros
portion between the quantities of labour neceflary for acquiring
different objects feems to be the only circumftance which can afford
any rule for exchanging them for one another. If among a nation
of hunters, for example, it ufually cofts twice the labour to kill a
beaver which it does: to kill a deer, one beaver fhould naturally
exchange for or be worth two deer. It is natural that what is
ufually the produce of two days or two hours. labour fhould be
worth double of what is ufually the produce of one day’s or one
hour’s labour,

Ir the one fpecies of labour fhould be more fevere than the other,
fome allowance will naturally be made for this fuperior hardfhips
and

F
if 1 hehe
wwerage, it

underftand
y are fold,
ix fhillings
- } confider
fent times;
quantity of

ties...

ids both the
d, the pros
br acquiring
h can afford
ng a nation
bur to kill a
d naturally
hat what is

fhould be
day’s or one

n the other;
or hardfhips
and

THE WEALTH OF NATIONS. $7

and the produce of one hour’s labour in the one-way may frequently © " ‘ P.
exchange for that of two hours labour in the other. wey

Or if the one fpecies of labour requires an uncommon: degree
of dexterity and ingenuity, the efteem which men have for fuch
talents, will naturally give a value to their produce, fuperior to
what would be due to the time employed about it. Such talents
can feldom be acquired but in confequence of long application,
and the fuperior value of their produce may frequently be no more
than a reafonable compenfation for the time and labour which
mutt be fpent in acquiring them. In the advanced ftate of fociety,
allowances of this kind, for fuperior hardfhip and fuperior fkill,
are commonly made in the wages of labour; and fomething of the
fame kind muft probably have taken place in its earlieft and rudeft
period,

In this ftate of things the quantity of labour commonly employed
in acquiring or producing any commodity, is the only circum-
ftance which can regulate the quantity of labour which it ought
commonly to purchafe, command, or exchange for.

As foon as ftock has accumulated in’ the hands of patticular
perfons, fome of them will naturally employ it in fetting to work
induftrious people, whom they will fupply with materials and
fubfiftence, in order to make a profit by the fale of their work,
or by what their labour adds to the value of the materials. In ex-
changing the complete manufacture either for money, for labour,
or for other goods, over and above what may be fufficient to pay
the price of the materials, and the wages of the workmen, fome- |
thing muft be given for the profits of the undertaker of the work
who hazards his ftock in this adventure. The value which the

en add to the materials, therefore, refolves it(:If in this
ou. I, I

cafe

THE NATURE AND CAUSES OF

cafe into two parts, of which the one pays their wages, the other the
profits of their. employer upon the whole ftock of materials and
wages which he advanced. He could have no intereft to employ
them, unlefs he expected from the fale of their work fomething
more than what was fufficient to replace his ftock to him; and he
could have no: intereft to employ a zreat ftock rather than a fall
onc, unlefs his profits were to bear fome proportion to the extent
of his ftock.

Tue profits of ftock, it may perhaps be thought, are only.a
different name for the wages of a particular fort of labour, the
labour of infpection and direction. They are, however, altogether
different, are regulated by quite different principles, and bear ‘no
proportion to the quantity, the hardfhip, or the ingenuity of this
fuppofed labour of infpection and direction, They are regulated
altogether by the value of the ftock emr'oyed, and are greater or
{maller in proportion to the extent of this ftock.’ Let us fuppofe,.
for example, that in fome particular place, where the common
annual profits of manufacturing ftock are ten per cent. there are
two different manufactures, in each of which twenty workmeniare
employed at the rate of fifteen pounds a year each, or at the ex-
pence of three hundred a year in each manufactory. Let us fup-
pofe too, that the coarfe materials annually wrought up in the
one coft only feven hundred pounds, while the finer materials. in
the other coft feven thoufand. The capital annually employed in the
one will in this cafe amount only to one thoufand pounds; whereas
that employed in the other will amount to feven thoufand three
hundred pounds. At the rate of ten per cent. therefore, the-un-
dertaker of the one will expect an. yearly. profit of about one
hundred pounds only; while that of the- other will expeét about
feven hundred and thirty pounds, But though their profits are fo
very different, their labour of infpection and direction: may be

either

e other the
terials and
t to employ
- fomething
m; and he
hana fall
> the extent

are only.a

labour, the
» altogether
nd bear ‘no
uity of this
re regulated
e greater or
us fuppofe,,
he common
nt. there are
yorkmen are
or at the ex-
Let us fup-
t up in the
materials, in
loyed in the

ds; whereas
bufand three
ore, the un-
f about one
xpect about

profits are fo
ion: may’ be
either

THE WRALTH OF NATIONS.

fome principal clerk, His wages properly exprefs the value of
this labour of infpeftion and direction. Though in fettling them
fome regard is had commonly, not only to his labour and {fkill,
but to the truft which is repofed in him, yet they never bear any
regular proportion to the capital of which he overfees the manag2-
ment; aud the owner of this capital, though he is thus difcharged
of almoft all labour, ftill expects that his profits fhould beara
regular proportion to it. In the price of commodities, there-
fore, the profits of {tock are a fource of value altogetlier different
from the wages of labour, and regulated by quite different prin-
ciples,

monly employed in acquiring or producing any commodity, is by
no means the only circumftance which can regulate the quantity
which it ought commonly to purchafe, command, or exchange for.
An additional quantity, it is evideit, muft be due for the profits
of the ftock which advanced the wagzs and furnifhed the materials
of that tabour.

As foon as the land of any country has all become private pro~
perty, the landlords, like all other men, love to reap where they
never fowed, and demand a rent even for its natural produce. The
wood of the foreft, the grafs of the field, and all the natural fruits
of the earth,’ which, when land was in common, coft only the
trouble of gathering them, come to have an additional price fixed
upon them. Men mutt then pay for the licence to gather them;
and in exchanging them either for money, for labour, or for other
goods, over and above what is due. ‘both for the labour of ga-
hering them, and for the profits of the ftock which, employs that

I2 labour,

In this ftate of things, therefore, the quantity of labour com-.

either dltagether! ot verry nearly the fame. “In many great works, CHA P,
almoft'the ‘whole ‘labour of this kind is frequently committed te e+—~

|
i]

|
| | ¥
1 H
hi
*) 4
ia | l
i iW

| |

BOOK
ry

THE) NATURES AND | CAUSES OF
labour, :fome ‘allowance; muft be made forthe price of the licence,

wey which conftitutes the fir rent of land. In the price, therefore,

of the greater part of commodities the rent of land comes in
this manner to conftitute a third fource of value,

In this ftate of things, neither the quantity of labour commonly
employed in acquiring ov producing any commocity, nor the pro=
fits of the ftock which advanced the wages and furnifhed the ma-
terials of that labour, are the only circumftances which can regulate
the quantity of labour which it ought commonly to. purchafe,
command, or exchange for. A third circurnftance muft likewife
be taken into confideration; the rent of t). land; andthe commo-
dity muft commonly purchafe, coromand, or exchange. for,: an
additional quantity of labour, in order to enable the perfon who
brings it to market, to pay this rent.

‘Tue real. value of all the different component parts of price is
in this manner meafured by the. quantity, of labour which they, can,

each of -them, purchafe or command. Labour meafures the value

not only of that part of price which refolves itfelf into labour, but
of that which refolves itfelf into rent, and of that which refolves
itfelf into profit.

In. every faciety, the price of every. commodity finally refolves
itfelf into fome one or other, or all. of thofe. three parts; and in
every improved fociety, all. the three enter more or lefs, as compo
nent parts, into the price of the far greater part of commodities.

In the price of corn, for example, one part pays the rent of the
landlord, another pays the wages or maintenance of the labourers
and labouring cattle employed in producing it, and the third pays
the profit of the farmer. Thefe three parts feem either imme-

5 diately

commonly
v the pro-
d the ma-
an regulate
- purchafe,
ft likewife
1e commo-
re for,’ an
perfon who.

of price is
h they. can,
8 the, value
abour, but
ich refolves

illy refolves
rts; and in
as compo<
nodities.

rent of the
e labourers
p third pays
her imme-

diately

THEI WEALTH OF! NATIONS.

diately or ultimately to!make up the whole: price ofitorns \Afourth © HAP.
part it:may perhaps be! thought,’ is neceffary for replacing the'ftock ———~

of the farmer, or for compenfating the tear and wear of his fae
bouring cattle, andother' inftruments of hafbandry. But it muft
be confidered that the price of any inftrument of hufbandry, fuch
aywlabouring horfe, is itfelf made up of the fame three parts; the
rent of the land upon which heis reared, the labour of tending and
rearing him, and the profits of thé farmer who advances both the
rent of this land, and the wages of this labour. Though the price
Of the corn, therefore, may pay the price as well as the mainte-
nance of the horfe, the whole price ftill refolves itfelf either im-
mediately or ultimately into the aig three parts of rent, labour,
and atthe

Ix the price of flour or meal, we muft add to the price of
the corn, the profits of the miller, and the wages of his fer-
vants; in the price of bread, the profits of the baker, and the
wages uf his fervants; and in the price of both, the labour of
tranfporting ‘the corn from the houfe of the farmer to. that of
the miller, and from that of the miller to that of the baker, to-
gether with the profits of thofe who advance the wages of that
labour.

Tux price of flax refolves itfelf into the fame three parts as that
of corn. In the price of linen we muft add to this price the
wages of the flax-drefier, of the fpinner, of the weaver, of the
bleacher, &¢,. together with the profits of their refpective em~
ployers.

As any particular commodity comes to be more manufactured,
that part of the price which refolves itfelf into wages and profit,
somes to be greater in proportion to that which refolves itfelf into:

rent.

THE NATURE! AND ‘CAUSES! OF

BOO K rent. In the progrefs of ‘the’ ‘mdnufaéture, tot ‘only’ the number
ue—~ of profits increafe, but every fublequent profit'is greater than the

foregoing; becaufe the capital from which it is derived’ muft al-
ways be greater. The capital which employs the weavers, for
example, muft be greater than that which employs the f{pinners;
becaufe it not only replaces that capital with its profits, but pays,
befides, the wages of the weavers; and the profits muft always
bear fome proportion to the capital.

In the moft improved focieties, however, there are always a
few commodities of which the price refolves itlelf into two parts
only, the wages of labour, and the profits of ftcck; and a ftill
fmaller number in which it confifts altogether in the wages of
labour, In the price of fea-filh, for example, one part pays the
labour of the filhermen, and the other the profits of the capital
employed in the fifhery. Rent very feldom makes any part of it,
though it does fometimes, as I fhall fhew hereafter. .It is other-
wife, at Jeaft through the greater part of Europe, in river fifheries,
A falmon fifhery pays a rent, and rent, though it cannot well be
called the rent of land, makes a part of the price of a falmon
as well as wages and profit. In fome parts of Scotland a few poor
people make a trade of gathering, along the fea fhore, thofe little
variegated {tones commonly known by the name of Scotch Pebbles.
The price which is paid to them by the ftone-cutter is altogether
the wages of their labour; neither rent nor profit make any part

of it.

Bur the whole price of every commodity muft ftill finally re-
folve itfelf into fome one or other or all of thofe three parts; as
whatever part of it remains after paying the rent of the land, and
the price of the whole labour employed in raifing, manufacturing,
and bringing it to market, muft neceflarily ke profit to fomebody.

yf As

y
1¢ Humber
r than the
mutt al-
avers, for
: fpinners ;
but pays,
ut always

always a
two parts
and a {till
wages of
't pays the
the capital
part of it,
t is other-
r fifheries.
ot well be
a falmon
a few poor
thofe little
h Pebbles.
altogether
e any part

finally re-
parts; as
land, and
facturing,
ymebody.

THE WEALTH OF. NATFONS.

As the price or exchangeable, value of every particular commo- © 4 f P,
dity, taken feparately, refolves itfelf into fome one or other or all ey—

of thofe three parts ; fo that of all the commodities which compofe
the whole annual. produce of the labour of every country, taken
complexly, muft, refolve itfelf into the fame three parts, and be
parcelled out among different inhabitants of the country, either
as the wages of their labour, the profits of their ftock, or the rent

of their land. The whole of what is annually either collected or

produced by the labour of every fociety, or what comes to the fame
thing, the whole price of it, is in this manner originally diftributed
among fome of its different members. Wages, profit, and rent,
are the three original fources of all revenue as well. as of. all ex
changeable value. All. other revenue is ultimately derived from
fome one or other of thefe.

Whoever derives his revenue from a fund which is his own,

muft draw it either from his labour, from his ftock, or from his
land. The revenue derived from labour is called wages.’ That de-
rived from ftock, by the perfon who manages: or employs it, is
called profit. ‘That. derived from it by the perfon who does not
employ it himfelf, but lends it to another, is called the intere?t or
the ufe of money. It is the. compenfation which the borrower pays.
to the lender, forthe profit which he has an opportunity: of making
by the ufe of the money. Part of that profit naturally belongs: to
the borrower, who runs the rifk and takes the trouble of employing
it; and part to the lender, who affords him the opportunity, of
making this profit. ‘The intereft of money is always a. derivative
revenue, which, if it is not paid from the profit whichis. made by
the ufe of the money, muft be paid from fome other fource of
revenue, unlefs perhaps the borrower is. a fpendthrift, who con-
tracts a fecond debt in order to pay the intereft of the firft.. The
revenue which proceeds altogether from land, is called rent, and

belongs

EhiiwNATURE AND CAUSES OF

belongs to. the. landlord... The reveaye.of .the farmer. is denived
partly from hia-labour,. and. partly from his ftock. To-bim, land
1s only the inftryment which enables.him to earn the, wages of this
labour, and to make the profits of this ftock,... All. taxes, and. all
the revenue which is founded upon them, all falaries, penfions,
and annuities of every kind, are ultimately derived from fome onc
or other of thofe three original fources of revenue, and are pail
either immediately or mediately from the wages of labour, the
profits of ftock, or the rent of land,

Wuen thofe three different forts of revenue belong to different
perfons, they are readily diftinguifhed; but when they belong to
the fame they are fometimes confounded with one another, at leaft
in common language.

A\GENTFLEMAN: who farms a part of his own eftate, after paying
the expence. of cultivation, fhould gain both the rent of the !land-
lord and the profit-of the farmer. He is apt to denominate, how-
ever, his whole gain, profit, and thus confounds rent with profit,
at leaft in common language. The greater part of our North
American and Weft Indian planters are in this fituation. They
farm, the greater part of them, their own eftates, and accordingly
we feldom hear of the rent of a plantation, but frequently, of its
profit.

Common farmers feldom employ any overfeer to direct the
general operations of the farm. They. generally teo, work'a good
deal with their own hands, as ploughmen, harrowers, &c. What
remains of the crop after paying the rent, therefore, fhould not
only replace to them their {tock employed in cultivation, together
with its ordinary profits, but pay them the wages which are due
to them, both as labourers and overfcers, Whatever. remains,

however,

r is desived
o him, land
ages of this
xes, and all
s, penfions,
m fome onc
and are paul
labour, the

sto different
y belong to
ther, at leaft

after paying
of the land-
‘inate, how-
: with profit,
f our North
tion. They
1 accordingly
uently of its

‘Oo direct the
work a good
&c. What
p, fhould not
ion, together
vhich are due
ever remains,
however,

THE WEALTH OF NATIONS.

‘however, after paying the rent and keeping up the'ftock, is called caar
-But wages evidently make'a part of it. The farmer, by c-y—o

profit.
faving thefe wages, muft neceffarily gain them. Wages, therefore,
are in this cafe confounded with profit. ;

AN independent manufacturer, who has ftock enough both to
purchafe materials and to maintain himfelf till he can carry his
work to market, fhould gain both the wages of a journeyman, whd
works under a mafter, and the profit which that mafter makes by
the fale of his work. His whole gains, however, are commonly
called profit, and wages are, in this*café too, confounded with
profit.

A GARDENER who cultivates his own garden with his’ own

hands, unites in his own perfon the three different characters, of
) iandlord, farmer, and labourer. .
pay him the rent of ‘the firft, the profit’ of the {econd;° and ‘the

His produce, therefore, fhould

wages of the third. The whole, however, is commonly confidered
as the carnings of his labour. | Both rent ‘and profit’ are; in ' this
cafe, confounded with wages. ! B

As in a civilized pee there are but few Bataan 2 of which
the exchangeable value arifes from labour only, ‘rent and profit
contributing largely to that of the far greater part of them, fo the
annual produce of its labour will always be fufficient to purchafe
or command a much greater quantity of labour than’ what was em-
ployed in raifing, preparing, and bringing that producé'to market.
If the fociety was annually to employ all the labour which it can
annually purchafe, as the quantity of labour would increafe greatly
every year, fo the produce of every fucceeding year would be of vattly
greater value than that of the foregoing. But there is no country
in which the whole annual produce is employed in maintaining the

Vou.I, induftrious.

THE NATURE AN) CAUSES OF

BHOE induftrious. The idle every where confume a great part of it;
~~ ahd according to the different proportions in which i¢ is annually

divided between thofe two different orders of people, its ordinary
or average value muft either annually increafe, or diminifh, or
continue the fame from one year to another.

CHAP. VII.

Of the natural and market Price of Commodities.

HERE is in eyery fociety or neighbourhood an ordinary or
average rate both of wages and profit in every different em+
ployment of labour and ftock. This rate is naturally regulated,
as I fhall fhow hereafter, partly by the general circumftances of the
fociety, their riches or povetty, their advancing, ftationary, or

declining condition; and partly by the particular nature of each
employment.

TueEre is likewife in every fociety or neighbourhood an ordinary
or average rate of rent, which is regulated too, as I fhall fhow
hereafter, partly by the general circumftances of the fociety. or
neighbourhood in which the land is fituated, and partly by the
natural or improved fertility of the land.

Tuese ordinary or average rates may be caHed the natural
rates of wages, profit, and rent, at the time and place in which
they commonly prevail.

Wuew the price of any commodity is neither more nor lefs
than what is fufficient to pay the rent of the land, the wages of the
7 labour,

ordinary or
ferent em+
y regulated,
ances of the
tionary, Or

e of each

an ordinary
fhall fhow
fociety. or
rtly by the

the natural
-e in which

pre nor lefs
ages of the
labour,

THE WEALTH OF NATIONS.

labour, and the profits of the ftock employed in raifing, preparing,
and bringing it to market, according to their’ natural ‘rates,
the commodity is then fold for what may be called: its natural
price, yontey

Tue commodity is then fold precifely for what it is worth,
or for what it really cofts the perfon who brifigs it to market ; for
though in common language what is called the prime coft of any
commodity does not comprehend the profit of the perfon who is
to fell it again, yet if he fells it at a price which does not allow him
the ordinary rate of profit in his neighbourhood, he is evidently
a lofer by the trade; fince by employing his ftgck in fome other way
he might have made that profit. His profit, befides, is his revenue,
the proper fund of his fubfiftence. As, while he is preparing and

* V7) bringing the goods to market, he advances to his workiien their
WHR. wages, or their fubfiftence, fo he advances to himéfelf, in the’ fame
=) manner, his own fubfiftence, which is generally fuitabld*¢o the

+) profit which he may reafonably expect from the fale of his goods.

Unlefs they yield him this profit, therefore, they do not repay

a ' him what they may very properly be faid to have really coft
i i him.

Tuovon the price, therefore, which leaves him this profit, is

} not always the loweft at which a dealer may fometimes fell his
MH goods, it is the loweft at which he is likely to fell them for any
j confiderable time; at leaft where there is perfect liberty, or where

he may change his trade as often as he pleafes,

Tug actual price at which any commodity is commonly {old
is called its market price. It may cither be above, or below, of
exactly the fame with its natural price.

Ka «THe

6»

CHAP,
Vil.
heya

THE NATURE AND CAUSES OF

‘Tre market price of every particular commodity is regulated
- by the proportion between the quantity which is aétually brought
to market, and the demand of thofe who are willing to pay the
natural price of the commodity, or the whole value of the rent,
labour, and profit, which mutt be paid in order to bring it thither.
Such people may be called the effectual demanders, and their de-
mand the effectual demand; fince it may be fufficient to effectuate
the bringing of the commodity to market. It is different from
the abfolute demand. A very poor man may be faid, in fome
fenfe, to have a demand for a coach and fix; he might like to have it;
but his demand is not an effectual demand, as the commodity can
never be brought to market in order to fatisfy it.

Waren the quantity of any commodity which is brought to:
market falls fhort of the effectual demand, all thofe who are wil-
ling to pay the whole value of the rent, wages, and profit, which
muft be paid in order.to bring it thither, cannot be fupplied with the
quantity which they want. Rather than want it.altogether, fome of
them will be willing to give more. A competition will immediately
begin among them, and the market ‘price: will rifé- more or lef,
above the natural price, according as the greatnefs.of the deficiency
increafes more or lefs the eagernefs of this competition. The
fame deficiency will generally occafion a more or let$ eager com-
petition, according as the acquifition of the commtodity happens to.
be of more or lefs importance to the competitors, Hence the ex-
erbitant price of the- neceffaries of life during the, blockade of a:
town or in a famine.

When the quantity brought to market exceeds the effectual
demand, it cannot be-all fold to thofe who-are willing to pay the:
whole value of the rent, wages and profit, which muft: be paid
in order to bring it thither; Some part mutt be fold to thofe who:

: are

lated
ought
ay the
rent,
ither.
ir de-

ctuate
from.
fome
ve it;
ty can

rht tos
e wil-
which
ith the
me of
diately
or lef,
ciency
The
com-
ens to
he ex-
> of a:

eCtual
ay the:
> paid
> who.

are

i y
ty.
uh

THE WEALTH OF NATIONS.

are willing to pay lefs, and the low price, which they give for it ©; cas P,
mutt reduce the price, of the. whole... The market price will fink eae

more or lefs below the natural, price, according as. the. greatnefs
of the excefs increafes more.or lefs the competition of the fellers,
or according as it happens to be more or lefs important. to them
to get immediately rid of the. commodity. The fame excefs. in.
the importation of. perifhable, will occafion a much greater com-
petition than in that of durable commodities; in the i importation
of Senate for i than i in that of old i iron. ay cts

Wuen the parity beatae to market is 5 jut faficient, to ‘Sagie
the effectual demand and no more, the market price naturally
comes to be either exactly, or as nearly as can be judged of, the
fame with the natural price. The whole quantity upon hand
can be difpofed of for this price, and cannot be’ difpofed’ of for

more.. The competition of the different dealers “obliges ‘them

all to accept of this price, but does not oblige them to > accept
of lefs.

THE quantity of every commodity brought to market naturally

fuits itfelf to the effectual demand. It is the intereft of all thofe:

who employ their land, labour, or ftock, in bringing any come
modity to market, that the quantity never fhould exceed the effece.

tual demand; and it is the intereft of all other ‘people. that, it:

never f{hould fall fhort of it,

Ir at any time it exceeds the effectual demand; fare of the:

component, parts of its price muft be paid below their natural
rate. If it is rent, the intereft of the landlords will immediately
prompt them to withdraw a part of their Jand; and if it is
wages or profit, the intereft of the labourers in the one, .cafe,, and
ef their employers in the other, will prompt them to, withdraw:

a part:

79 THE NATURE AND CAUSES OF

BOOK a part of their labour or ftock from this employment. The
—y—_ quantity brought to market will foon be no. more than fisfficient

to fupply the effectual demand. All the different parte, of, ite
price will rife to their natural rate, and the whole. price to its
natural price. - | |

Ir, on the contrary, the quantity brought to market fhould i.
at any time fall fhort of the effectual demand, forme of the com- Bt
ponent parts of its price muft rife above their natural rate. If it Ni

is rent, the intereft of all other landlords will naturally prompt ae
them to prepare more land for the raifing of this commodity ; if it
is wages or profit, the intereft of all other labourers and dealers = ||
will foon prompt them to employ more labour and ftock in pre- |
paring and bringing it to market. The quantity brought thither a
will foon be fufficient to fupply the effectual demand. All the Ba
different parts of its price will foon fink to their natural rate,
and the whole price to its natural price.

Tue natural price, therefore, is, as it were, the central price,
to which the prices of all commodities are continually gravitating. Fe
Different accidents may fometimes keep them fufpended a good ce
deal above it, and fometimes force them down even fomewhat a:
below it. But whatever may be the obftacles which hinder them a
from fettling in this center of repofe and continuance, they are a
conftantly tending towards it. ! a

Tur whole quantity of induftry annually employed in order a4
to bring any commodity to market, naturally fuits itfelf . this
manner to the effectual demand. It naturally aims at bringing
always that precife quantity thither whieh may be fufficient to
fupply, and no more than fupply, that demand.

SS ee ee ae S| PS ee eee ee een ee a a a ee

JuT

t.. The
aflicient
). Of its
e to its

| Should
he com-
» If it
prompt
ys if it
1 dealers
in pre-
t thither
All the
al rate,

al price,
vitating.
a good
mewhat
er them
they are

in order
f .a this
bringing
cient to

bs
Ne.

THE WEALTH OF NATIONS.

Bur in forhe employments the fame quantity of induftry will CH AP,
ih different years prodiice very different quantities of commbddities; —\—

while in others it Will produce always the fame, or very nearly
the famé. The fame number of labourers in hufbandry wiil,
in different years, prodtice very different quantities of corn, wine,
oil, ‘hops, &c. But the fame number of fpinners and weavers.
will every year product the fame or very nearly the fame quantity
of iinen and woollen cloth. It is only the average pradi-ce of

the oné fpecies of induftry which can be fuited in any “-foect to

the effectual demand ; and as its actual produce is freque: such
greater and frequently much lefs than its average produce, the
quantity of the commodities brought to market will fometimes
exceed a good deal, and fometimes fall fhort a good deal of the
effectual demand. Even though that demand therefore fthould
continue always the fame, their market price will be liable to:
great fluctuations, will fometimes fall a good deaf bélow, and
fometimies rife a good deal above their natural price. In the other
fpecies of induftry, the produce of equal quantities of labour
being always the fame or very nearly the fame, it can be more
exactly futted to the effectual demand. While that demand con-
tinues the fame, therefore, the market price of the commodities
is likely todo fo too, and to be either altogether, or as nearly as.
can be judged of, the fame with the natural ptice. That the
price of linen and woollen cloth is liable neither to fuch frequent
nor to fuch great variations as the price of corn, every man’s ex-
perience will inforr: him. The price of the one fpecies of com-
modities varies only with the variations in the demand: That of
the other varies, not only with the variations in the demand,,
but with the much greater and more frequent variations in the

quantity of what is brought to market in. order to fupply that
demand,

72 THE NATURE AND CAUSES OF

BOOK Tux occafional and temporary fluctuations in the market price

i—~— of any commodity fall chiefly upon thofe parts of its price which
refolve themfelves into wages and profit. That part which refolves
itfelf into rent is lefs affected by them. A rent certain in money
is not in the leaft affeéted by them cither. in its rate or in its
value. A rent which confifts either in a certain proportion or '
in a certain quantity of the rude produce, is no doubt affected in
its yearly value by all the occafional and temporary fluctuations a
in the market price of that rude produce: but it is feldom affected i
by them in its yearly rate. In fettling the terms of the leafe, the (| 7
landlord and farmer endeavour, according to their beft judge- x
ment, to adjuft that rate, not to the temporary and occafional,
but to the average and ordinary price of the produce.

Sucu fluctuations affect both the value and the rate either of
wages or of profit, according as the market happens to he either
over-{tocked or under-ftocked with commodities or with labour ;
with work done, or with work to be done. A publick mourning
raifes the price of black cloth (with which the market is almoft
always under-ftocked upon fuch occafions) and augments the
profits of the merchants who poflefs any confiderable quantity of
it. It has no effeét upon the wages of the weavers. The market
is under-itocked with commodities, not with labour; with work
done, not with work to be done. It raifes the wages of journey-
men taylors. The market is here under-ftocked with labour.
There is an effectual demand for labour, for more work to be
done than can be had. It finks the price of coloured filks and
cloths, and thereby reduces the profits of the merchants who have
any confiderable quantity of them upon hand. It finks too the i
wages of the workmen employed in preparing fuch commodities, ”
for which all demand is ftopped fo: fix months, perhaps for a

twelyemonth,

Deena ee ee

1 aba
i
4
j
{
i
|
i

Vid
i

THE IWeAL TH oF NATIONS. #3

tt price = twelvemonthh >The ipsa tpieditbe iat aeiiteeabodairas CH vi } /
which 62 dites'antd ati abodt) en ee selina siti note iy
refolves : son :sicsiaime $year Jatt] Kip NBR aia forbear avieids
oo ” “Bur riiake ‘the tharket sie ‘of’ sia ‘commodit ity’
bridge | is in’ this “tiantier “conitintially” ‘gravitating, “if ‘one may fay 0,
“es oil ? towaids the natural price, yet fometimes ‘particular accidents, fome-
aa sh a 4 times natural’ catifes,” and” fometimes’ " particular” regulations of
pipes ii poli¢e;may, ‘in’ many cortifodities; Keep up the'market : price, | for,
affected ia a toe ‘time togethet, ‘a’ good'dedl' above the natutal pice.
afe, the 1
judge - ra WuHeN ‘by an increafe in the effectual demand, ‘the. market price
saftonal, a of fome particular commiodity happens to rife a good, deal above
7 the natural price, thofe who employ their ftocks in ‘fapplying that
market are generally careful to conceal this change. If it was
either of commotily known, theif’ great profit would tempt fo many new
be either ~~. rivals’ to ‘employ their ftocks in the fame way that, the effectual
labour ; ‘ ae demand being fully fupplied, the market’ price would foon be re-
ourning [lait duced to the “natural price, and perhaps for‘ fome time even
s almoft below ity “If the market is ata great diftante from ‘the refiderce
pnts the of thofe who fupply it, they may fometimes be able to keep the
antity of fecret for feveral years together, and may fo long enjoy their extra-
market ye ordinary profits without any new rivals. Secrets of this ‘kind
th work 4 © however, ,it_ mutt: be’ acknowledged, can feldom be Jong:‘kept ;
ourney- E: f and the extraordinary’ profit car laft very little longer than they
labour. a are kept.
k to be a 4 f
ilks and aC SrcreTs in manufactures are capable of being longer kept
Mo have | than fecrets in trade. A dyer who has found the means of pro-
tee the ee ducing a particular colour with materials which ¢coft only half
Stik eos the price of thofe commonly made ufe of, may, with good manage-
for i ment, enjoy the advantage of his difcovery as long as he. lives,
ie ae and even leave it as a legacy to his pofterity. His extraordinary
emonth, aa Vo. I ;
; ou. I, L gains

aise a i

EN ee a ESRI RRB
ee ti a z ;
a a. anne emai marae

THE NATURE AND CAUSES OF

BOOK gains aife from the high price which is paid for his private labour.
emcees They properly confift in the high wages of that labour. But as

they are repeated upon every part of his ftock, and as their whole

amount bears, upon that account, a regular proportion to it,
they are commonly confidered: as extraordinary profits of ftock.

Sucs enhancements of the market price are evidently the effects
of particular accidents, of which, however, the operation may
fometimes laft for many years together.

Some natural productions require fieh. a fingularity of foil and
fituation, that all the land in a great country, which is fit for pre-
ducing them, may not be fufficient to fupply the effectual demand..
The whole quantity brought to market, therefore, may be dif-
pofed of to thofe who are willing to give more than what is fufficient
to pay the rent of the land which produced them, together with the
wages of the labour, and the profits of the ftock which were em<
ployed in preparing and bringing them to market, according to their
natural rates. Such commodities may continue to: be fold at. this
high price for whole centuries together, and that part of it which
refolves itfelf into the rent of land is in this cafe the part which
is generally paid above its natural rate. The rent of the land
which affords fuch fingular and efteemed productions, like the
rent of fome vineyards.in France of a peculiarly happy foil. and
fituation, bears no regular proportion to the rent of other equally
fertile and equally well cultivated land in its neighbourhood. The
wages of the labour and the profits of the ftock employed in
bringing fuch commodities to market, on the contrary, are feldom
oui of their natural proportion to thole of the other employments
of labour and ftock in their neighbourhood.

Sucu enhancements of the market price are evidently. the
effect of natural caufes which may hinder the effectual. demand
from

labour.
But as
ir whole
n to it,
ack.

e effects
jon may

' foil and
for pre-
demand...
y be dif-
fufficient
with the
were em<
g to their
d at. this
it which
rt which
the land
like the
foil. and

equally
l, The
ployed in
‘e feldom
loyments

tly the
_ demand
from

THE WEALTH OF NATIONS,

from ever being fully fapplied, and which may continue, therefore, Ct! 4

to operate forever.

A moNnopory granted cither to an individual or to a trading
company has the fame effect as a fecret in trade or manufactures.
The monepolifts, by keeping the market conftantly underftocked,
by never fully fupplying the effe€tual demand, fell their commo-
dities much above the natural price, and raife their emoluments,
whether they confi(t in wages or profit, greatly above their natu-
ral rate.

Tue price of monopoly is upon every occafion the higheft which

can be got. The natural price, or the price of free competition, on’

the contrary, is-the loweft which can be taken, not upon every

occafion, indeed, but for any confiderable time together. The one’ —

is upon every occafion the higheft which can be f{queezed' out’ of
the buyers, or which, it is fuppofed, they will confent to give:

The other is the loweft which the fellers can commonly afford:

to take, and at the fame time continue their bufinefs.

Tue exclufive privileges of corporations, ftatutes of apprentices
fhip, and all thofe laws which reftrain, in particular employments,
the competition to a fmaller number than might otherwife go
into them, have the fame tendency, though in a lefs degree. They
are a fort of enlarged monopolies, and may frequently, for ages to~
gether and in whole clafles of employments, keep up the market.
price of particular commodities above the natural price, and main-
tain both the wages of the labour and the profits of the frock
employed about them fomewhat above their natural rate.

Sucu enhancements of the market price may laft as long as.

the regulations of police which give occafion to them,

L 2 THE

yé

BOGOR

THE NATURE AND CAUSES OF

Tur market price of any particular commodity, though it may
continue long above, can feldom continue long below its natural
price. Whatever part of it was paid below the natural rate, the
perfons whofe intereft it affected would immediately. feel: the lof,
and would immediately withdraw either fo much land, or fo much:
labour, or fo much ftock; from being einployed about it, that the
quantity brought to market would foon be no more than fufficient
to fupply the effectual demand. Its market price, therefore, would’
foon rife to the natural price. This at leaft would be the cafe.
where there was perfect liberty.

Tue fame ftatutes of apprenticefhip and other corporation laws.
indeed, which, when a manufacture is in profperity, enable the
workman to raife: his wages a: good deal above their natural rate,
fometimes oblige him, when it decays, to let them down a good
deal. below it. As in: the one-cafe they exclude many people from
his employment; fo in the other they exclude him from. many

employments. The effect of fuch regulations, however, is not
near fo durable.in finking the workman’s wages below, as in raifing
them above their natural rate. Their operation in the one way
may endure for many centuries, but im the other it can laft no
longer than the lives of fome of the workmen who were. bred to
the bufinefs in the time'of its profperity. When they are gone, the
number of thofe who are afterwards educated to the trade will natu-
rally fuit itfelf to the effectual demand. The police muft beas violent
as that. of Indoftan or. antient Egypt (where every man was bound
by a principle of religion to follow the: occupation of his father,
and. was fuppofed to.commit the moft horrid facrilege if lie changed:
it for another) which can in any particular employment, and for.
feveral generations together, fink either the wages of labour or
the profits of ftock below their natural rate..

Tus

igh it may
its natural
l rate, the
1. the lofs,
r fo much:
t, that the
n fufficient
re, would’
e the cafe.

ation laws.
enable the
tural rate,
vn a good
sople from
rom. many
er, is not
3 in raifing
e€ one way
can laft no
re. bred to
> gone, the
will natu-
as violent
as bound
is father,

ie changed:
t, and for.

labour or

THis

THE WEALTH OF NATIONS,

Tuts is all that I think neceflary to be obferved at prefent con- C i f P..
cerning the deviations, whether occafional or permanent, of ay

the market price of commodities from the natural price.

Tue natural price itfelf varies with the natural rate of each of
its component parts, of wages, profit, and rent; and in every
fociety this rate varies according to their circumftances, accord-
ing to their riches or poverty, their advancing, ftationary, or de~
clining condition. I fhall, in the four following chapters, endea-
vour to explain, as fully and diftinétly as I can, the caufes of thofe
different. variations.

First, I fhall endeavour to explain what are the circumftances
which naturally determine the rate of wages, and in what manner

thofe circumftances are affected-by the riches or poverty, by the

advancing, ftationary, or declining ftate of the fociety.

Seconpiy, I fhall endeavour to fhow what are the circums
ftances which naturally determine the rate of profit, and in what
manner too thofe circumftances are affected by the like variations
in the ftate of the fociety.

| THOUGH pecuniary wages and profit are very different in the
different employments of labour and {tock yet a certain propor-
tion feems commonly to take place between both the pecuniar y
wages in all the different employments of labour, and’ the pecu-
hiary profits in all the different employments of ftock. This
proportion, it will appear hereafter, depends: partly upon the
nature of the different employments, and partly upon the
different laws and policy of the fociety in which they are carried
on. But.though in many refpects dependant upon the laws.and

policy, this proportion feems to be little affeéted by the riches.

THE NATURE AND CAUSES OF

or poverty of that faciety; by its advancing, (tatignary, or de-
clining condition; but to remain the fame or very nearly. the
fame in all thofe different ftates, I fhall, in the third place, en-
deavour to explain all the diffeccnt circumftances which regulate
this proportion,

In the fourth and laft place I fhalt endeavour to fhow what are
the circumftances which regulate the rent of land, and which either
raife or lower the real price of all the different fubftances which
it produces, '

CHAP. VII.

Of the Wages of Labour.

“THE produce of labour conftitutes the natural recompence or
wages of labour.

In that original ftate of things, which precedes both the appro-
priation of land and the accumulation of ftock, the whole pro-
duce of labour belongs to the labourer, He has neither landlord
nor mafter to fhare with him.

Hap this ftate continued, the wages of labour would have aug-
mented with all thofe improvements in its productive powers, to
which the divifion of labour gives occafion. All things would
gradually have become cheaper. They would have been produced
by a fmaller quantity of labour; and as the commodities produced
by equal quantities of labour would naturally in this ftate. of

7 things

ry, or de-
nearly. the
place, en-
h regulate

v what are
hich either
ces which

mpence or

he appro-
hole pro-
- landlord

have aug
owers, to
Zs would
produced
produced
} ftate of

things

THE WEALTH OF NATIONS.

thirigs be exchatiged for one another, they would have been pur-
chafed likewife with the produce of a fmaller quantity.

Bur though all things would have become cheaper in reality,
in appearance many things might have become dearer than be-
fore, or have been exchanged for a greater quantity of other goods.
Let us fuppofe, for example, that in the greater part of employ-
ments the productive powérs of labour had been improved to "n-
fold, or that ’s labour could produce ten times the «jurntity
of work wl ‘one originally; but that in a particular citi
ployment they improved only to double, or that a day’s
labour could produce only twice the quantity of work which it had
done before. In exchanging the produce of a day’s labour in the
greater part of employments, for that of a day’s labour in this par-
ticular one, ten times the original quantity of work in them would

CHAP,
Vill.
(aemeomyaced

purchafe only twice the original quantity in it. Any particular —

quantity in it, therefore, a pound weight, for example, would
appear to be five times dearer than before. In reality, however,
it would be twice as cheap. Though it required five times the
quantity of other goods to purchafe it, it would require only half
the quantity of labour either to purchafe or to produce it. The
acquifition, therefore, would be twice as eafy as before. -

BuT this original {tate of things, in which the labourer enjoyed
the whole produce of his own labour, could mot laft beyond the
firft introduction of the appropriation of land and the accumulation
of ftock. It was at an end, therefore, long before the moft con-
fiderable improvements were made in the productive powers of
labour, and it would be to no purpofe to trace further what might
have been its effects upon the recompence or wages of labour.

As foon' as land becomes private property, the landlord demands |

a fhare of whatever produce the labourer can either raife, or col-
lect

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THE NATURE AND CAUSES OF

lect from it. His rent makes the firft deduétion is the Beviger
of the labour which is employed upon land.

Ir feldom happens that the perfon who tills the. ground . has
wherewithal to” maintain ‘himself till he reaps the barveft, His
maintenance is generally advanced to him from the ftock of a
mafter, the farnier who employs him, , and who. would have no
intereft to employ him, unlefs he was to fhare in the produce of
his labour, or unlefs his ftock was to be replaced to him with a
profit. This profit makes a fecond deduction from the produce
of the labour which is employed upon land.

Tue produce of almoft all other labour is liable to the ‘like
deduétion of profit. In all arts and manufaétures the greater part
of the workmen ftand in need of a mafter to advance them the
materials of their work, and their wages and maintenance till it be
compleated. He fhares in the produce of their labour, or in the
value which ‘it adds to the materials upon which it is beftowed ;
and in this fhare confifts his profit.

Ir fometimes happens, indeed, that a fingle independant work-
aan has ftock fufficient both to purchafe the materials of his work,
and to maintain himfelf till it be compleated. He is both matter
and workman, and enjoys the. whole produce of his own. labour,
or the whole value which it adds to the materials upon which
it is beftowed. It includes what are ufually two diftiné& revenues,
belonging to two diftinét perfons, the profits of ftock, and the
wages of labour.

Sucu cafes, however, are not very frequent, and in every part
of Europe, twenty workmen ferve under a mafter for one that is
independant; and the wages of Jabour-are every where underftood

F
he produce

round as
veft, His
ftock of .a
d have no
produce of
him with a
he produce

to the like
sreater part
e them the
ce till it be
, or in the
| beftowed ;

dant work-

f his work,
oth mafter
wn. labour,

pon which |

revenues,
s, and the

every part
fone that is
underftood

THE WEALTH OF NATIONS,

the owner of the {tock which employs him another.

Wuar are the common wages of ‘labour depends every where
upon ‘the contract ufually made between thofe two parties, -whofe
interefts are by no.means thefame. ‘The workmen. defire to get as
‘much, the matters to.give as little as poflible. ‘The former are
difpofed to combine.in order to raife, the latter im order to lower
the wages of labour... ;

Ir is not, ‘however, difficult to forefee which of the two parties

-muft, upon all: ordinary occafions, have the advantage in the dif-

ypute, and force ‘the ether into a compliance with their terms.

‘The matters;:-being fewer in number, cannot only combine more

eafily, but the. daw. authorifes-their combinations, or at ‘leat does
not prohibit them, while it »prohibits thofe of the-workmen. ‘We
have no acts of parliament againft combining to lower the price of
.work; but many againft combining ‘to raife it. In all fuch dif-
sputes the mafters can hold out much longer. A landlord, a: far-
mer, a mafter manufacturer, or merchant, though they did not

-employ a fingle workman, could generally live a year or two upon

the ftocks which they have already acquired. Many workmen
could not fubfift a week, few could fubfift a month, and {carce
any a year without employment. In the long-run the workman

may be as neceflary. to his mafter as his mafter is to him; but the

neceflity is not fo immediate.

We rarely hear, it has been faid, of the combinations of mafters ;

though frequently of thofe of workmen. But whoever imagines,
upon this account, that mafters rarely combine, is as ignorant of
the world aa of the fubject. Mafters are always and every where

ina fort of tacit, but conftant and uniform combination, notto
Vor. I, : M

raife

81
to'be, what they ufually are, when the labourer is one perfon, and CHAP.
yw

VAI.

THE NATURE AND CAUSES OF

Bao K raife the wages -of labour above their actual rate. To violate this
te combination is. every where a moft unpopular action, and a fort

of reproach to a mafter among his neighbours and equals. We.
feldom,. indeed, hear of this combination, becaufe it is the ufual,

and one may fay, the natural ftate of things which nobody ever
hears of. Mafters too fometimes enter into particular combina-
tions to fink the wages of labour even below this rate. . Thefe
are always ‘conduéted with the utmoft fileace and fecrecy, till the:
moment of execution, and when the workmen. yield, as they fome-
times do, without refiftance, though feverely felt by them, they:
are never heard of by other people, Such combinations, however,.
are frequently refifted by a contrary defenfive combination of the
workmen; who fometimes, t00; without any; provocation of this
kind, combine, of, their own, accord to raife:,the-. eprice.of their la-
bour. ‘Their ufual pretences. are, fometimes,; the.bigh price of pror
vifions; fometimes. thegreat profit which their.mafters. make by their
work, .But whether their. combinations, be offenfive or defenfive
they are always abundantly: heard, of,,..In order to bring: the point
to a fpeedy decifion, they. have, always recourfe-to. the loudeft: cla-

‘mour, and fometimes,to the, moft, fhocking violence and: outrage.

They are defperate, and act with tlie folly and.extravagance of def-
perate men, who muf ftarve or frighten their mafters into an.im-
mediate compliance with their demands. “I” rafters upon thefe
occafions are juft as clamorous upon the o.i«t fide, and. never
ceafe to call aloud for the affiftance of the civik magiftrate, and the
rigorous execution of thofe laws which have been enacted with fo
much feverity againft the combinations of fervants, labourers, and
journeymen, The workmen; accordingly, very feldom derive any
advantage from the violence of thofe tumultuous combinations,
which, partly from the interpofition of the civil’ magiftrate, partly
from the fuperior fteadinefs of the mafters, partly from the ne-
ceffity which the greater part of the workmen .are under of fub-

mitting

age
iolate this
and a fort
als. We
the ufual,.
body ever
+ combina-
. . Thefe
cy, till the:
they fome-
them, they:
3, however,.
tion of the
ion of this
of their: la-
rice of pror
ake by their
or defenfive
g: the point
oudeft: cla-
ind: outrage.
ace of def-
nto an. im-
s upon thefe
, and. never
te, and the
&ed with fo
pourers, and
derive any
»mbinaticns,
trate, partly
om the ne-
dey of fub-
mitting

THE WEALTH OF. NATIONS,

witting for:the fake of prefent fubfiftence,’ generally end” iti fho-
thing, but we neat or ruin the ringleaders.

‘Bur: ia in” difputes witht ‘their’ workmen, ‘matters’ ‘mutt
geiieratly that the! advantage,’ there is however a certain tate below
which it feenis ‘impoffible’to reducé, for any confiderable time,
the egies “— even of the lowelt fpecies of reoniett

A ‘Mae thuft! ala live by his ‘Wolk! and his wages muf* at
leaft be'fufficient to maintain him, They mutt ‘even upon. moft
occafions be foriewhat mores otherwife it would be impoffible to
bring up‘a'fainily; dnd’ ‘the race of fuch workmen gould not laft
beyond thé firft generation.’ Mr. Cantillon feems, | Uy on this ac-
count; to” fuppofe ‘that’ the ‘loweft fpecies of common Tabourers
muft ‘every where earn’at lealt double their’ own maintenance, in
order that’ one’ with another they may be enabled to bring up two

4 children’; the labour of the wife, ‘on account of her neceflary at-

tendance'on:'the children, being fuppofed ‘io more than fufficient
to provide for herfelf.’ But one-half the children born, it is come
puted, die before the age of manhood. The pooreft labourers,
therfore, according to this account, mutt, one with another, attempt
to rear at leaft four children, in order that two may have an. equal
chance of living to that age. But the neceflary maintenance of
four children, it is fuppofed, may be nearly equal to that of one
man. The labour of.an able-bodied flave, the fame author adds,
is computed to be worth double his maintenance; and that of the
meaneft labourer, he thinks, cannot be worth lefs than that of
an able-bodied flave. -Thus far at leaft feems certain, that, in order
to bring up a family, the labour of the hufband and wife together
muft, even in the loweft {pecies of common labour, be able to
earn fomething more than what is -precifely neceflary for their own
maintenance; but in what proportion, whether in that above
: M 2 _ mentioned,

84 THE NATURE AND CAUSES OF

B ao K mentioned, or in-any’ nee I fhall not take upon me to deter-

Ture, are. certain: circumftances, however, -which fometimes
give the labourers an advantage, and enable them, to. raife their
wages confiderably above this rates evidently.the -loweft. which is
confiftent with common humanity.

Wen in any country the demand for thofe who live by wages;.
labourers, journeymen, fervants.of every kind, is continually in-
creafing; when eyery year furnifhes employment for 2 greater
number than had been employed the year before, the workmen
fiave no occafion to.combine in order to. raife their wages. The.
fcarcity. of hands oceafions a competition among: matters, who bid
againft one another in. order to get them, and thus voluntarily
break ,through the natural, combination. of mafters, not to raife
wages. .

_ "Tine demand’ for thofe whe live by wages, it is evident, cannot
increafé but in: proportion’ to the increafe of the funds which are
deftined: for the payment of wages. Theft funds are of two kinds ;.
firft, the revenue which is‘ over arid above what‘is neceflary for the
maintenance; and, fecondly, the {tock which is over and above
what is neceflary for the employment ‘of their matters.

‘Wuen the landlord; annuitant, or monied man, has a greater
reventic than’ What he judges fufficient’ to maintain his own family,
he employs either the whole or a part of the furpliis in maintaining
one or more menial férvants, Increafe this furplus, and he will
naturally increafe the number of thof fervants.

Wien an independant workman, fuch as a weaver or fhoe-
maker, has got more {tock than what ‘is’ fufficient to ptirchafe
7 the

F
. to deter=

fometimes
yaife their
t. which is

; by wages ;.
tinually in-
r.@ greater
e workmen
ages. The
rs, who bid

voluntarily
ot to raife

lent, cannot
is which are
f two kinds;.
sflary for the
and above

as a greater
own family,
maintaining

and he will

er or fhoe-
to plirchafe
the

than inpsany «part of :‘England..'\In the: provange of New. sYork,
‘wequal: to:two:fhillings fterling,, a days: thip-carpenters. ten dbillings

(equal: dn-alitto fix, fhillings and fixpence, fterling ; hops carpenters

(THE. WRAMEA QE NATIONS

she sevice of Bip roto. Soa A PA if till he ¢
eee ee ree us
Ay % e we

ee An exder to make. ‘@ “pre t by their
if hi, fran, spony will: na 1 Pere
his: joneneymen.. is

~ “atid demand for thale who live by wages; therefore, neéetlily
pniger mie ficreale of the fevetive ‘and flock of every Couns
try, ahd cattnot pothbly ititréale without ik’ “Theinevéak of reverive
‘bid Teock49 tHe? initredie GF national Wealth’! The dentdnd’ fer
thot’ Whd' Hive ty’ weges; therefore, “atarafly increatee with’ the
aneredl OF “Hiatt Wellth,"“Und cannot pOMBly intent wink
Sue if, 7a mug al YeeDORAGs TOME tut) Je nebaied sits! mists cer
Wut, ,enQi6229, Flom -nOdy) Aleettotes vaared mot lan erys
i.e dsmotithe aftual, greatnels.af national: wealth,..hut its. 0m
inal increale,. which: .ocrafions «rife iia the wages of labour.
UU¢tisonot, accordingly, in, the riche eountaicm but, ip the matt
ithiviying) ott in, thofe which.are, growing iiehy the: fafteRt,.. that: the
wages of: labour ,are :higheft. . Englind:is.certaialys:in the profant
times, a. much .ticher country than any;.part of; North America.
, The. wages.ofdabour, however, . are. much: higher.in. North America

igotamon:.Jabourers:, earn ; three. .fhilfings . snd: Spence: .cursency,

and fixpence.currency, with-a pint of rum worth fixpence:ferling,

‘saird: dbticklayess,ieight -thillingscurceney,, .equal,.9 four; fhillings
and fixpense {terling s, journeymen taylons, faye, Aaliings. curremey,
‘equal, :to:about two dhillings and ten-pence Merling. Thee; prices
are all above the.London.prices and wages are.faid-to.be.aschigh
in the other. colonies. as in New York, “The price:of: provifions is
every. wherein, Nosth America much, lower than in' England. iA
dearth .has, never been known: there. . An: the wort {eafons, they

Vou. I. M 3 have

THE; NATURE AND CAUSES; OF

BOOK have-glways had a fufficiency for, themfelves, though lefs for expor-
yieeky tation. If the money price of labour, therefore, be higher than

itis any where.in the mother, country, ; its real price, the, real come
mand of the; -neceflaries and conyeniencies of life. which it conveys

to the labourer, mutt be higher in a ftill greater proportion... ,
But though North America is not ‘yet fo ‘rich ds England, “it is

much more thriving, ‘and advancing with muchi greater tapidity to
the further, acquifition of riches... The molt decifive:mark of the

profperity:of any country is-the: inereafe of the ‘nuinber of’ its
inhabitants. In -Great: Britain and moft-other Etropean couritries
they. are not: fuppofed to double in lefs than: five hundred years.
In the Britith colonies in North America, it has been found, that
they double in twenty. or five .and twenty years: “Nor in the
prefent times: is this increafe ‘principally: owing’ to ithe continual
importation: of ‘tew inhabitants, but to the great: multiplication of
the f{pecies,’ ‘Thole who’ live to old age, it is: fad,’ frequently fe

‘there from fifty to a hundred, and: fometimes many more, deftend-

ants from their own body. Labour - ig there fo, well rewarded that
a numerous’ family of children, inftead of -being ‘2 ‘a borthen, ‘is a
fource of opulence and: ‘profperity to’ the parents. The: labour: of
each child, before it can leave ‘their ‘houte, is computed’ to be worth
-a hundred: pounds clear gain tothem. “A young widow with four or
five young children, who, ‘araong the middling or infertor'ranks of
people in Europe, would have fo little chance for a‘fecond hutbaiid,

$s there frequently courted:as a fort of fortune: Phe’ value of

children is the greateft.of: all. encouragements to’ ‘marriage. “We
cannot,’ therefore, wonder that the people in‘North- America: fhoirtd
generally marry very young.: Notwithftanding’ the great ‘increafe
occafioned by fuch early marriages, there is a continual complaint
of the fcareity of hands in North America. The demand for
labourers, the funds deftined for maintaining them, increafe,. it
feems, ftill fafter than they can find labourers to employ.

Trovcu

for expor-
igher than:
real com-
it conveys
10M...) 4

sland, "it is
tapidity to

with four or
jor'ranks of
@ hufband,
he value of
reat‘increafe
complaint
demand for
increafe, it

TrovuGcn

THE WEALTH OF NATIONS.

Tuovcn the wealth of a country fhould’ be very great, yet CHAP.

‘

VIII.

if it has ‘been long: ftationary, we muft not expeét to find.the —~—~

wages of labour very high in it. The funds deftined: for the pay-
ment of wages, the revenue and ftock. of its inhabitants, may be
of the greateft extent, but if they have continued for feveral cen-

turies of the fame, or very nearly of the fame extent, the number of

labourers employed every: year could. eafily fupply,' and: even: more:
than fupply, the. number wanted the following year. ‘There could:
feldom.be-any fcarcity of hands, nor could the mafters be obliged:
to bid againft one another in.order to. get them. The hands, on:

the contrary, would, in: this.cafe, naturally multiply beyond their

employment. There would be a:conftant fcarcity.of employment;.
and the labourers. would be obliged to. bid again{t one another in:
order to get it. If in fuch a.country the wages of labour had ever:
been more than fufficient to maintain the labourer and to enable him:
to bring up. a. family, the competition of the labourers: and the

f intereft. of. the mafters would foon reduce them to this loweft rate.

which is confiftent with common humanity. China.has been long:
one of the richeft, that is, one of the moft fertile,. beft. cultivated,.
moft induftrious and moft populous countries in.the world. It.feems,.
however, to have. been long ftationary. Marco Polo, who vifited it:
more. than five hundred years ago, defcribes its cultivation, induftry

_and populoufnefs almoft in the fame terms. in: which they. are de-.

{cribed by travellers in the prefent times. It had pcrhaps even long:
before his, time acquired:that full complement. of iicties which the
nature of its. laws. and inftitutions permits. it to.acquire: The:
accounts of all travellers, inconfiftent in many. other refpects, agree:
in the low wages of labour, and in the.difficulty which a labourer
finds in bringing up a family in China. If by.digging-the ground ai
whole day he can get what will purchafe.a fmall.quantity-of rice in.
the evening, he is contented. The condition. of artificers is, if,
poflible, ftill worfe.. Inftead of waiting, indolently in their worke.

houfs,,

THE NATURE AND CAUSES OF

i houfes, for the calls of their'‘cuftomers, ae in Europe, ‘they’ are
i———_ continually running about the ftreets with the ‘tools’ of itheir

refpective trades, offering their fervice, and as it’ were’! ‘begying

employment. “Phe poverty of ‘the'lower ranks’ of people in China
far furpaffes that of the moft beggarly nations in‘Europe. “fh the
neighbourhood of Canton many hundred, it fs commonly ‘aid,
many thoufand families have no habitation on the Jand, ‘but live
conftantly-in little fithing ‘boats upon the rivers’ and canals. ‘The
fubfiftence which they find there is fo fcanty that ‘they | are eager
to fifh up the naftieft garbage thrown overboard from any ‘European
fhip. Any carrion, the carcafe of a dead dog or cat, for example,
though half putrid and ftinking, is as welcome to them as the
moft wholefome food to the people of other countries, “Marriage
is encouraged in China, not by the profitablenefs of children, but
by the liberty of deftroying them. In all great towns feveral are
every night expofed'in the ftreet or drowned like puppies in the
water. The performance of this horrid office is even faid to be the
avowed bufinefs by which fome people earn their fabliftence.

Cuna, however, though it may perhaps ftand ftill, does not
feem to go backwards. Its towns are nowhere deferted by their
inhabitants. ‘The lands which had once been cultivated are no-
where neglected. “The fame or very nearly the fame annual labour
muft therefore continue to be performed, and the funds deftined

‘for maintaining it muft not, confequently, be fenfibly diminifhed.

The loweft clafs of labourers, therefore, notwithftanding their
fcanty fubfiftence, muft fome way or another make fhift to continue
their race fo far as to keep up their ufual numbers,

Bur it would be otherwife in acountry where the funds deftined
for the maintenance of labour were fenfibly decaying.- Every year
the demand for fervants and labourers would, in all the different

claffes

wid THE WEALTH OF .NATIONS. 89

pe, ‘they vy claffes of employments, be lefs than it:had been the year before. ad | tel
sin pel — Many who had been bred in ‘the fuperior clafies,, not, being. able to ———~
ore begging find employment in their own bufinefs, would be iglad.to feck it inthe
ple int China loweft. The loweft clafs being not only. overfto¢ked with its own
ope. “Eh the workmen, but. with the overflowings of all.the other claffes, the
amonily “faid, competition for employment would be fo great in it, as to reduce
ind, ‘but live __ the wages of labour to the moft miferable and feanty fubfiftence of
canals, ‘The ‘the labourer, Many would not be able to. find employmentieven
icy are eager } upon thefe hard terms, but would either ftarve, or be driven to
ny European feek a fubfiftence either by begging, or by the perpetration perhaps
for example, | of the greateft enormities.’ Want, famine, and mortality would
them as the 7 immediately prevail in that clafs, and from thence extend themfelves
$. “Marriage | | to all the fuperior clafies, till ‘the number of inhabitants in the
children, but §j | country was reduced to what could eafily be maintained by the.
ns feveral are | revenue and ftock which remained in it, and which had efcaped
uppies in the mm cither the tyranny or calamity which had deftroyed the reft. This
faid to be the ‘7, perhaps is nearly the prefent ftate of Bengal, and of fome other of
ftence. — '.the Englifh fettlements in the Eaft Indies. In a fertile country
An age =6which had before been much depopulated, where fubfiftence, con-
till, does not ji | fequently, fhould not be very difficult, and where, notwithftanding,
ferted by their [im | three or four hundred thoufand people die of hunger in one ‘year, we
vated are no- | may be affured that the funds deftined for the maintenance of the
annual labour labouring poor are faft decaying. The difference between the
nds deftined _ genius of the Britith conftitution which protects and governs
ly diminifhed. North America, and that of the mercantile company which oppreffes
anding their . and domineers in the Eaft Indies, cannot perhaps be better illuf-

ift to continue faa trated than by the difierent {tate of thofe countries.

Tue liberal reward of labour, therefore, as it is the neceflary
effect, fo it is the natural fymptom of increafing national wealth.

unds deftined The fcanty maintenance of the labouring poor, on the other hand,
Every year is the natural fymptom that things are at a ftand, and their ftar-

I the different ving condition that’ they are going faft backwards.
claffes Vor. I. N IN

THE NATURE: AND. CAUSES OF

In Great Britain the wages of labout feem, \in-the:prefent times,

to be evidently more than what is preci(ely neceflary to-enable the
labourer to bring up a family. In order to fatisfy ourfelves, upon
this point it will not be neceflary to enter into any terious or
doubtful calculation of what may be the loweft fum upoi. vhich
it is poffible to do this. There are many plain fymptoms that the
wages of labour are nowhere in this country regulated by this
lowelt rate which is confiftent with common humanity,

First, in almoft every part. of, Great Britain. there i is a
tinction, even in the loweft Species of labour, between {a
and winter wages. Summer wages, are always higheft. But on
account of the extraordinary expence of fewel, the maintenance of
a family is moft expenfive, in winter, Wages,, therefore, being
‘higheft when this expence is loweft, it feems. evident that they are
not regulated by what is neceflary for this expences but by, the quan-
tity and fuppofed value of the work. A labourer, itumay be faid
indeed, ought to fave part of his fammer wages.in order to ‘defray
his winter expence 3 and that through the whee, year they | do not
exceed what is neceflary to maintain his family through the whole
year. A flave, however, or one ‘abfolutely dependent on us for
immediate fubfiftence, would not be treated in this manner. His
daily fubfiftence would be. proportioned to his daily neceflities,

SzconpLy, the wages of labour do not in Great Britain fluc-
tuate with the price of provifions. ‘Thefe vary everywhere from
year to year, frequently ‘from’ month to month. But in many
_ places the money price of ‘labour remains uniformly the fame
fometimes. for half a century together. If in thefe places, there-
fore, the: labouring poor can maintain their families in dear years,
they muft be at their eafe in times of moderate plenty, and_in
affluence in thofe of extraordinary cheapnefs. The high price of
provifions during thefe ten years paft has not in many parts of the

kingdom

THE WEALTH. OF NATIONS. 91

kingdom ‘been accompanied with ‘any fenfible rife in the money CH AP.
price of labour. '' It has, indeed, in fome: owing probably more U-—~
cp neney Crews eine Se ee than to that of the price
of apenas
Tumpty; as the price of provifions varies more from year to
year than the wages of labour, fo, on the other hand, the wages
of labour vary more from place to place than the price of pro-
vifions. The prices of bread and butcher’s meat are generally
the fame or very nearly the fame through the greater part of the
united kingdom. Thefe and moft other things which are fold
by retail, the way in which the labouring poor buy all things, are
generally fully as cheap or cheaper in great ‘towns than in the
remoter parts of the country, for reafons which I‘ fhall have oc-
cafion to explain hereafter. But the wages of labour in a great
town and its neighbourhood are frequently a fourth or a fifth part,
twenty or five and twenty per cent higher than at 4 few miles
diftance. Eighteen pence a day may be reckoned the common
price of fabour in London and its neighbourhood. At a few miles
diftance it falls to fourteen and fifteen pence, Ten-pence may
be reckoned its price in Edinburgh and its neighbourhood. At
a few miles diftance it falls to eight pence, the ufual price of com-
mon labour through the greater part of tte low country of Scot-
land, where it varies a good deal lefs than in England. Such a
difference of prices, which it feems is not always .fufficient to
tranfport a man from one parifh to another, would neceffarily oc-
cafion fo great a tranfportation of the moft bulky commodities,
not only fiom one parifh to another, but from one end of the
kingdom, almoft from one end of the world to the other, as would
foon reduce them more nearly to a level. After all that has been
faid of the levity and inconftancy of human nature, it appears evi-
dently from experience that a man is of all forts of luggage the moft
N 2 difficult

THE) NATMREOAND CAUSES OF

BOOK difficalt:to be:tranfported.’: Iéthe; dahouring poor, therefore, can
Pichi maintain their familiesim thofe parts of the kingdom, where the price

of labour is loweft, oan muft be in affluence where it is oe
FourTuvy;’' the vieiattins | inthe price of: datiinns not: pionty.
do‘hot correfpond either in ‘place of 'tinve with thofé inthe price
of jttbir but sir are one, ie —— WORE!
Grain, the food of the common people, ‘is dearer by ‘Scotland’
than in England, ‘whence Scotland’ ‘Feceives ‘atmo evel year very
large fupplies. But Englifh corn muit be! fold dearer i in Scotland, the.

conn f to. which i it is eit than i in asia: the mace from:

upon the quantity. of flour, o or ‘meal which } it ig at the. mill, _andi
in this refpect. Enghith grain is. fo much fuperior fo the. ‘Scotch that,,
though. often dearer in ‘appearance, , or in r :Btoportion t to. the mea~
fure of its bulk, it is generally cheaper i in ‘reality. or, in ‘proportion:
to its quality, or. even. to. the meafure of. its. weight. The price:
of, labour,, on.the,contrary,. is dearer in, England, than in, Scotland.
If, the labouring, poor, therefore,..can maintain their, families in.
the one part, of the united, kingdom,, they mutt, be in affluence.
in the other, Oatmeal indeed. fupplies the, common people in,
Scotland. with the greateft. and, the beft.part_ of, their, food, which.
is in general much inferior to that. of their, neighbours of the:
fame rank in, England. . This difference, however, in the mode.:
of their fubfiftence is not.the caufe,. but. the effect of the. difference.
in their wages; though, by a ftrange mifapprehenfion, I Nave fre-.
quently heard it reprefented. as the caufe, It is _not.becaufe one.
man keeps a coach while. his neighbour walks. a-foot,. that the
4 : ane.

THE WEALTH. OF NATIONS. 99

sean of ifvichoandicthe othercpoorsibut becaufeithe:.one is rich he CHAP.
a pene a _— na arb tie aoe is: da he walks ‘afoot. ane
Durine the bite of the laft sailed ‘taking one year with
only. another, grain was dearer in.:both parts.of the united kingdom.
price. than during that of/ the prefent. . This is a: matter of; fact which.
cannot: now: admit. of any. .reafonable; doubt ;) and: the proof of:
it is, if poffible, {till more. deciftve with regard: to-Scotland than:
land’ with: regard to: England, _ It, is.in Scotland fupported. by the evi--
very dence. of the publick fiars, annual valuations.made upon oath,
, the according to the actual ftate of. the markets,. of all. the. different:
Pai. forts. of grain in every different: county of. Scotland:. If fuch.
‘fold: direct: proof could require any collateral evidence to confirm it,
fame. F would obferve- that thig has likewife been! the cafe in France,. and
> efly probably i in: moft other parts of: Europe: “With regard to France
andi there is the cleareft proof. Bet though it is: certain that in both:
that,. parts of the united kingdom: grain was fomewhat dearer in the latft.
She century: than in the prefent, it’ is. equally:certain. that labour was
ton. much cheapers. If ‘the’ labouring: poor, therefore, could bring up
HG their families then; they: mutt’ be much: more at their eafe now.
er In the laft century, the moft ufaal: day-wages of common labous
pang... through the greater part of Scotland were fixpence in: fummer
nanos and five-pence's in winter. © Three fhillings.a week, the fame price
MEN EP very nearly; ftill-continues to be ‘paid in fome parts-of the. High-
le, in. lands ‘and: weftern Iflands.” Through the greater part of the low
hich. country the moft-ufual wages of common labour: are-now eight-
‘ the: pence a day; ten-pence, fometimes a hilling about Edinburgh, in.
mode: the counties: which border: upon England, probably on account.
bie as of’ that: neighbourhood, and in-a few-other places where. there
r itr kas lately been: a:confiderable rife in the demand for labour, about
fished Glafgow,; Carron, Ayr-fhire, &c; In-England the improvements
it _ of. agriculture, manufactures and.commerce. began - much earlier
ane.

than ;

THE NATURE AND CAUSES OF

than in Scotland. ‘The demand for labour, and confequently its price,
mutt neceffarily have increafed with thofe improvements:. In the laft
century, accordingly, as. well as ‘itt the prefent, the wages of! labour
were higher in England than in‘ Scotland. “They have rifen too
confiderably fince that time, thotigh on account of. the greater
variety of wages paid there in different places, it is more difficult
to afcertain how much, In 1614, the pay of a foot foldier was
the fame as in the prefent times, eight pence a day. When it
was firft eftablifhed it would naturally be regulated by the ufual
wages of common labourers, the rank of people from which foot
foldiers are commonly drawn. Lord Chief Juftice Hales, who
wrote in the:timeiof Charles II; computes :the nectflary expence
of a labourer’s family, confifting of: fix. perfons,' the father and
mother, two children able to:do:fomething}::and two not able, at
ten ‘fillings’ a: week, or twenty-fix poundsia: year. | If. they can-
not earn ‘this by their labour, they muft make it up, he fuppofes,
either by begging or ftealing. He appears to have, enquired very
carefully into this fubject. In 1688, Mr. Gregory King, whofe
{kill in political arithmetick is fo much extolled by Doétor. Dave-
nant, computed the ordinary income of. labourers and out-fervants
to be fifteen pounds a year toa family, which he fuppofed to-
confift, one with another, of three and a half perfons, His cal-
culation, therefore, though different in appearance, correfponds
very nearly at bottom with that of judge Hales, Both fuppofe
the weekly expence of fuch families to be about twenty-pence a
head. Both the pecuniafy income and expence of fuch families
have increafed confiderably fince that time through the greater
part of the kingdom; in fome places more, and in fome lefs;
though perhaps fcarce any where fo much as fome exaggerated
accounts of the prefent wages of labour have lately reprefented
them to the publick. The price of labour, it muft be obferved,
cannot ‘be afcertained very accurately anywhere, different prices

being

ence
and

ep, at
can-~
bofes,
very
jhofe
Javee
yants

d to-

cal-

jonds

ppofe
nce a

nilies
eater
lefs ;
rated
nted
rved,
rices
eing

THE WEALTH ,OF: NAMTIONS.,

being often p: « atithe fame; place, ‘and, for. the fame fort, of bieind: CHA

95 -

AP.

not onlyjace:. aing.to the different abilities of the workmen, . but oy

according to the eafinefs ;.or, -hardnefs. of. the, mafters. Where
wages are not regulated by law,-all: that, we.can pretend to deter-

mine is what are the moft, ufual ;; and experience feems to fhow

that law: can never ons them propetys though it has often
pretended todo fo.

Tue real recompence’of labour, the real quantity of the ne-
ceflaries and ‘conveniencies of life which it. can procure to the
labourer, has, during! the courfe of the. prefent century, increafed
perhaps in a! ftill greater proportion than its money price. Not
only grain has become fomewhat cheaper, but many other things
from which the induftrious.poor derive an agreeable and whole-
fome variety of food, have become a great deal cheaper. Potatoes,
for example,.do ‘not -at prefent, through the greater part of the
kingdom,’ coft ‘half the price which: they ufed to do thirty or
forty years ago. » The fame thing may be faid of turnips, carrots,
cabbages; things which were formerly never raifed but by the
fpade,. but which are now commonly raifed by the plough. All
fort of garden ftuff too has become cheaper. The gyeater part
of the apples and even of the onions confumed in Great Britain:
were in the laft century imported from Flanders. .. The great im-
provements in the coarfer manufactures of both linen and woollen
cloth furnifh the labourers. with cheaper and better cloathing ;:
and thofe in the manufactures of the coarfer metals, with cheaper
and better inftruments of trade, as well as with many agreeable
and convenient pieces of houfehold furniture. Soap, falt, can-
dies, leather, and fermented liquors have, indeed, become a good
deal dearer; chiefly from the taxes which have been laid upon:
them. The quantity of thefe however which the labouring
poor are under any neceffity of confuming, is fo very {mall that

7 the:

AQae

THE NATURE AND CAUSES OF

the increafe.in their price does not compenfate the’ diminution in
that .of, fo: many other: things. The common complaint that
luxury. extends itfelf even to the loweft ranks of the people, and
that,,the labouring: poor will not now be contented with :the fame
food,; cloathing and lodging which fatisfied them in former times,
may, convince, us that. it is not the money price of labour only,
but its real recompence which has augmented.

is this improvement in the circumftances of the lower ranks of
the people-to ‘be regardedas an advantage or as an inconveniency
to the fociety ? The anfwer feems at firft fight abundantly plain.
Servants, labourers and workmen of different kinds, make up
the: far greater part of every great political fociety. But what
improves’ the ‘circumftances of the greater part can never be re-
garded as'ani iniconveniency to the whole. No fociety can furely

‘be! flouriffiing ‘arid happy, of which the far greater part of the

members aré poor and miferable. It is but equity, befides, that
they! who ‘feed, cloath and lodge the whole body of the people,
fiould have fuch -a fhare of the produce of their own labour as
t0°be themf€lves tolerably well fed, cloathed and lodged.

Poverty, though it no doubt difcourages, does not always
prevent. marriage. It feems even to be favourable to generation.
A, half, ftarved Highland woman frequently bears more than
twenty children, while a pampered fine lady is often incapable of
bearing any, and is generally exhaufted by two or three, Bar-
rennefs, fo frequent among women of fafhion, is very rare among
thofe of inferior ftation. Luxury in the fair fex, while it enflames
pethaps the paffion for enjoyment, feems always to weaken and
frequently to deftroy altogether the powers of generation,

Bur

> |

THE WEALTH OF: NATIONS, 97

-Bur “poverty;though it does: not: prevent the generation, is C a A P.
éatvenmalyt unfavourable: to the rearirig! of: childreny’ The'tender ;
plant is produced, ‘butlinfo'cold’a foil and’ fo fevere a‘ clitirate) foont
withersand: dies; :It:is niotvuncommon, ‘I have’ been frequently
told, imthe’ Highlands:of::Scotland fora mother who has borne
twenty:children :not; to: have ‘twovalive, Several officers ‘of great
experience have affured:me:that fo far from recruiting their regi-
ment, they have never been able to fupply: it with drums and fifes
from all the foldiers children,.that were).born. init. A. greater
number, of fine children,..however, .is .feldom {een anywhere: than
about a;.barrack.of foldiers. .. Very: few:of:themj it feems, ‘arrive
at, the,age of thirteen.or fourteen, :..In fome places ene half the
children, ;born,,die. before, they..are four years:ef ages:in thany
places, before they are. feven.;.,and, in. almoft)all, places. before: they
are nine or ten,. This great mortality, however,,.will every where
he found chiefly among the children, of the common people,.who
cannot afford; to tend them with the fame care as. thofe of better
ftation, Though their marriages are, generally more. fruitful. than
thofe of people of fathion,.a fmaller proportion of their children
arrive at maturity. In foundling hofpitals, and among the children
brought up by parifh charities the mortality is {till eri than
among thofe of the common people.

Every {pecies,of animals naturally multiplies in proportion
to the means .of their fubfiftence, and no fpecies can ever ‘mul-
tiply beyond it. But in civilized fociety it is orily among the
inferior ranks of people that the fcantinefs of fubfiftence can fet
limits, to the further multiplication of the human fpecies; and it
can do fo in no other way than by deftroying a great part of the
children, which their fruitful marriages produce,

THe liberal reward vf labour, by enabling them to provide bettne
for their children, and confequently to bring up a greater number,
Vor. I. Oo naturally

98 THE NATURE AND CAUSES OF

SGOK fattirally’ tends to widen and extend thofe limits. It deferves
Cs td'be ‘remarked 66) that it neceflarily docs this as nearly as pol-
fiblé in the” proportion ‘which the demand for labour requires;
If this demand! is continually increafing, the reward of Labour
muft nedeffarily encourage in fuch a manner the marriage and
inultiplication ‘of labourers, as may -endble them to fupply that
continually intreafing demand by:a continually incredfing popu-
lution. If ‘it fhould ‘at any ‘time be lefs than what was requifite
for' this purpofe, the ‘deficiency of hands would foon raife it;
anid! if ‘it‘fhould at-any time be more, their exceflive multiplication
would foon ‘lower it 'to this neceflary rate.. ‘The market would
- be! fo'much> dnderftocked: with Jabour in the. one cafe, and {o
witich overftocked in the other, as would ifoon force ‘badk its price
to that'proper sate which the circumftances of the fociety required.
¥tis‘in ‘this manner that'the demand for men, like that for any
other commodity, neceflarily regulates the produétion of men ;
quickens it when it goes on ‘too flowly, and {tops it when -it
advances ‘too 'faft. It is this demand :which regulates and-deter-
‘qines ‘the ftate of propagation -im all the different countries of
‘the world, in ‘North America, in Europe, and in ‘Chinas which
renders it rapidly progréffive in the firft, flow and gradual in the
fecond, and altogether ftationary in the Jaft.

‘0 *ae tear and wear of a flave, it has been faid, is at the expence
of his: mafter; but that of a free fervant is at his own expence.
The tear and wear of the latter, however, is, in reality, as much
at’ the expence of his mafter as that.of the former. The wages
paidto journeymen and fervants of every kind muft.be fuch as
may enable’them, one with another, to. continue the race of journey-
men and fervants, according as the increafing, diminithing, or
‘ftationary ‘demand of the “feciety may happen to ‘require. iBut
though: the tear and wear of 2 free fervant be equally ‘at the : ya

te)

pence
ence.
much
wages
ch as

mey-
B, or
‘But
pence
of

THE-WEALTH OF NATIONS.

of his mafter, it generally cofts him much: lefg than that of a ¢

HAP.

Il.

flave. The fund deftined for replacing or repairing, | if I may, fay teenies

fo, the tear: and. wear of the flave, is commonly managed, by ;@
negligent mafter or carelefs overfeer, That deftined for perform,
ing the fame office with regard to the free. man, is managed by the
free man himfelf. The diforders which: generally prevail in the
economy of the rich, naturally introduce themfelves into the
management of the former: The {trict frugality and parfimonioys

attention of the poor as naturally eftablifh themfelves in. that

of the latter. Under fuch different management, the fame pur
pofe muft require very different degrees of expence to, execute it.
It appears, accordingly, from the experience of all ages and) nae
tions, I believe, that the work done by freemen comes, cheaper
in the end than that performed by flaves. It is found.to,do fo

even at Bofton, New York, and Philadelphia, where, the wean

of common labour are fo very high. ney 4orttc

THE liberal reward of labour, therefore, as it is the effet of
increafing wealth, fo it is the caufe of increafing population... To
complain of it is to lament over the neceflary effect, and saute nf
the greateft publick profperity. bass
Li1a93h
Ir deferves to be remarked, perhaps, that it is inthe progreflive
ftate, while the fociety is advancing to the further acquifition,
rather than when it has.acquired its full complementof: riches, that
the condition .of the labouring poor, of the great body ofthe peo-
ple, feems to be the happieft and the moft comfortable. , Jt is thayd

"an the ftationary, and miferable in the declining ftate. The pro-

groflive {tate is in eeality the cheerful and the hearty ftate to.all
the different orders of the fociety. The Aatieoarel is rate she
declining, anslaneholy, - , MISS

‘Tux

THE NATURE-AND CAUSES OF

Tue liberal reward of labour, as it encourages the propagation,
fo it increafes the induftry of the common people. The wages of
labour are the encouragement of jnduftry, which, like every other
human quality, improves in proportion to the encouragement it
receives. A plentiful fubfiftence increafes the bodily ftrength of
the labourer, and the comfortable hope of bettering his:condition,
and of ending his days perhaps in eafe and plenty, animates him to
exert that ftrength to the utmoft. Where wages are high, ac-
cordingly, we fhall always find the workmen more active, diligent,
and expeditious, than where they are low; in England, for .ex-
ample, than in Scotland; in the neighbourhood of great towns, .
than in remote country places. Some workmen, indeed, when
‘they can earn in four days what will maintain them through the
week, will be idle the other three. This, however, is by no
means the cafe with the greater part. Workmen, on the contrary,
when they are liberally paid by the piece, are very apt to over-work
themfelves, and to ruin their health and conftitution in a few
years. A carpenter in London, and in fome other places, is not
fuppofed to laft in his utmoft vigour above eight years. Some-
thing of the fame kind happens in many other trades, in which the
workmen are paid by the piece; as they generally are in manu-
factures, and even in country laboyr, wherever wages are higher
than ordinary. Almoft every clafs of artificers is fubjeé&t to. fome-
peculiar infirmity occafioned by exceffive application to their pe-
culiar fpecies of work. Ramuzzini, an eminent Italian phyfician,
has written a particular book concerning fuch difeafes. We-do-not
reckon our foldiers the moft ‘induftrious fet of people among us.
Yet when foldiers have been employed in fome particular forts of
work, and liberally paid by the piece, their officers have frequently
been obliged to ftipulate with the undertaker, that they fhould not
be allowed to earn above a'certain fum every day, aecording to the
rate at which they were paid. Till this ftipulation was made,

4 mutual

THE WEALTH OF NATIONS, 305

mutual emulation and the defire of greater gain, frequently prompt- CHP:
ed them to over-work themielves,: and:to. hurt their. health by, Gn
exceflive labour. Exceffive application: during four days of. the
week, is frequently the real caufe of the idlenef9:of the other
three, fo much and fo loudly complairiediof. |: Great labour,: either
of mind or body, continued for feveral days: together, is inimoft
men naturally followed by a great defire:of relaxation,, which, if
not reftrained by. force or by fome ftrong neceffity,' is) almoft)ir-
refiftable. It is the cal! of nature, which, requires to be relieved by
fome indulgence, fometimes of eafe only; bus! ‘fometimes| tod of
diffipation and diverfion. If it is not complied with, the confe-
quences are often dangerous, and fometimes. fatal,::and:fuch as
almoft always, fooner or later, bring on the: peculiar:infiemity. of
the trade. If mafters would always liften to the; dictates of reafon.
and humanity, they have frequently occafion. rather, to, moderate,
than to animate the application of many of their workmen, . It.will

fo itiedanatetyy, as to be able to work conftantly, not only Craigs
his health the longeit, but,, in the. courfe of the year, executes, athe
pater quantity of work..

Iw: cheap years, it is pretended, workmen are generally,, more:
idle, and in dear ones. more. induftrious than ordinary,,;,.A plen-
tiful fubfiftence, therefore, it has been concluded,. relaxes,; and.a
fcanty one quickens. their induftry. That a little. more plenty
than ordinary may render fome workmen idle, cannot well-be
doubted;. but that it fhould have: this effect upon: the greater. part,
or that men.in general fhould work better when.they are, ill, fed
than when they are well fed,. when they,are difheartened than when
they are.in good fpirits, when they are frequently fick than when
they are generally in good health, feems not very probable, Years
of dearth, it is to be obferved, are generally among the common

people

102

THE NATURE AND CAUSES OF

BOO K people ycars of ficknefs and mortality, which cannot fail to dimi-
—vy— nih the product of their indu(try.

In years of plenty, fervants frequently leave their mafters, and
traft their fubfiftence to what they can make by their own induftry.
But the fame cheaphefs of provifions, by increafing the fund which
is deftinéd for the tidintenance of fervants, encourages mafters,
farmers éfpecially, to employ a greater number. Farmers. upon
fuch occafions expeét more profit from their corn by maintaining
a few' more labouring fervants, than by felling it at a low price in
the friatket. The demand for fervants increafts, while the number
Of thofe Who offer to fupply that demand diminifhes. The price
of labour, therefore, frequently rifes in cheap years. _

In years of fcarcity, the difficulty and-uncertainty of fubfiftence
make all fuch people eager to return to fervice. But the high price of
provifions, by diminifhing the funds deftined for the maintenance
of fervants, difpofes mafters rather to diminifh than to increafe the
number of thofe they have. In dear years too, poor independant
workmen frequently confume the little ftocks with which they had
ufed to fupply themfelves with the materials of their work, and are

‘obliged to become journeymen for fubfiftence. More people want

‘éimployment than can eafily get it; many are willing to take it
upoh lower terms than ordinary, and the wages of both fervants
4fid journeymen frequently fink in dear years.

Masters of all forts, therefore, frequently make better ‘bar-
ais with their fervants in dear than in cheap years, and ‘find
thtth itore “hunible and dependant ‘in the ‘fornter thun inthe latter.
“They naturally, therefore, commend the former as more favourable
to induftry. Landlords and farmers, ‘befides, two of the largeft
claffes of mafters, have another reafon for being pleafed with dear

7 years.

pr THE WEALTH OF NATIONS.

years. The rents of the one and the profits of the other depend ©

103

HAP.
VIII.

very much upon the price of provifions, Nothing can be more ———~

abfurd, however, than to imagine that. men in general fhould
work lefs when they work for themfelves, than when they work.
for other people, A poor independant workman will generally
be more induftrious than even a journeyman who works by the
piece. The one enjoys the whole produce of his own induftry; the
other fhares it with his mafter. The.one, in his feparate, inde-
pendant ftate, is Jefs liable to the temptations of bad company,
which in large manufactories fo frequently ruin the morals of the
other, The fuperiority of the independant workman over thofe
fervants who ase hired 'by the month or .by the year, and whofe
wages and maintenance are the fame whethey they do much or
do little, is likely to be ftill greater. Cheap years tend to increafe
the proportion of independant workmen to journeymen: and fer-
vants of all kinds, and dear years to diminifh it.

A ‘Frencn author of great knowledge and ingenuity, Mr.
Meffanee, receiver of the taitles in the election of St. Etienne,.
endeavours to fhow that-the peor do more work in ¢heap than in:
dear years, by comparing: the quantity and value of the goods made:
upon thofe different occafions in three different manufactures; one
of coarfe, woollens carried‘on: at-Elbeuf; one of linen, and another of
filk, both which extend -through the whole: generality of Rouen.

It appears from his account, which is copied from the regifters of

the publick offices, that the quantity and value of the goods
made im all thofe three: manufactures has generally been greater
in cheap than in dear years; and that it has always been. greateft
inthe. cheapeft, and leaft in the deareft years. All the three {eem.
to be ftationary manufactures, or which, though their produce
may vary fomewhat from year to year, are “pen. the whole nei-
ther going backwards nor’ forwartls.

Tus

104

BOOK
|

THE NATURE AND CAUSES OF

Tue manufacture of linen in Scotland, and that of coarfe wool
lens in the weft riding of Yorkthire, are growing manufactures,
of which the produce is generally, though with fome variations,
increafing both in quantity and value. Upon examining, how-
ever, the accounts which have been publifhed of their annual pro-
duce, I have not been able to obferve that its variations have had
any fenfible connection with the dearnefs or cheapnefs of the fea-
fons. In 1740, a year of great fcarcity, both manufactures, in-
deed, appear to have declined very confiderably. But in 1756,
another year of great fcarcity, the Scotch manufacture made more
than ordinary advances, The Yorkfhire manufacture, indeed,
declined, and its produce did not rife to what it had been in, 1755
till 1766, after the repeal of the American ftamp act. In that and
the following year it greatly exceeded what it had ever been before,
and it has continued to do fo ever fince,

Tue produce of all great manufactures for diftant fale muft ne-

ceflarily depend, not fo much upon the dearnefs or cheapnefs of
the feafons in the countries where they are carried on, as upon the
circumftances which affect the demand in the countries where they
are confumed; upon peace or war, upon the profperity or de-
clenfion of other rival manufactures, and upon the good or bad
humour of their principal cuftomers. A great part of the extra-
ordinary work, befides, which is probably done in cheap years, never
enters the publick regifters of manufactures, The men-fervants
wh« ieave their mafters become independant labourers. The wo-
men return to their parents, andcommonly {pin in order to make
cloaths for themfelves and their families. Even the independant
workmen do not always work for publick fale, but sre employed
by fome of their neighbours in manufactures for farily uc. The
produce of their labour, therefore, frequently makes no figure in

_ thofe publick regifters of which the records are fometimes pub-

lithed

THE WEALTH OF NATIONS.

105

ited with fo much parade, and from which our merchants and C fae
manufacturers would often vainly pretend to anounce the profperity —~—~

or declenfion of the greateft empires,

Tuovon the variations in the price of labour, not only. do not
always correfpond with thofe in the price of provifions, but are
frequently quite oppofite, we muft not, upon this account, ima-
gine that the price of provifions has no influence upon that of
labour. The money ptice of labour is neceffarily regulated by
two circumftances; the demand for labour, and the price of the
neceflaries and conveniencies of life. The demand for labour,
according as it happens to be increafing, flationary, or declining,
or to require an increafing, ftationary, or declining population,
determines the quantity of the neceflaries and conveniencies of life
which muft be given to the labourer; and the money price of
labour is determined by what is requifite for purchafing this quan-
tity. Though the money price of labour, therefore, is {ometimes
hig. where the price of provifions is low, it would -be ftill higher,
the demand continuing the fame, if the price of provifions was
high.

Ir is becaufe the demand for labour increafes in years of fudden
and extraordinary plenty, and diminifhes in thofe of fudden and
extraordinary fcarcity, that the money price of labour fometimes
rifes in the one, and finks in the other.

In a year of fudden and extraordinary plenty, there are funds
in the hands of many of the employers of induftry, fufficient to
pare and employ. a greater number of induftriqus people than

had been employed the year before; and this ¢xtraordinary num-
ber cannot always be“had. Thofe mafters, therefore, who want
more workmen ‘bid againft one another, in order to get them,

Vou. f. P which

THE NATURE AND CAUSES OF

which fometimes raifes both the real and the money price of their
labour.

Tne contrary of this happens in a year of fudden and extraordinary
fcarcity. The funds deftined for employing induftry are lefs than
they had been the year before. A confiderable number of people are
thrown out of employment, who bid againft one another in order to
get it, which fometimes lowers both the real and the money price of
labour. In 1740, a year of extraordinary fcarcity, many people were
willing to work for bare fubfiftence. In the fucceeding’ years of
plenty, it was more difficult to get labourers and fervants..

Tue fcarcity of adear year, by diminifhing the demand for la-

bour, tends to lower its price, as the high price of provifions .

tends to raife it. The plenty of a cheap year,, on the contrary, by
‘increafing the demand, tends to raife the price of labour, as the
‘cheapnefs of provifions tends to lower it.. In the ordinary varia-
tions of the price of provifions, thofe two oppofite caufes feem to
counter-balance one another; which is probably in part the reafon
why the wages of labour are every where fo much more fteady and
permanent than the price of provifions.

Tues increafe in the wages of labour neceffarily increafes the
price of many commodities, by increafing that part of it which
refolves itfelf into wages, and fo far tends to diminifh their con-
fumption both at home and abroad, The. fame caufe, however;
which raifes the wages of labour, the increafe of ftock, tends to
‘increafe its produétive powers, and to make a fmaller quantity of
‘labour produce a greater quantity of work. . The owner of the
“ftock which employs a great number of labourers, neceffarily en-
‘ deayours, for his own advantage, to make fuch a proper divifion
and diftribution of employment, that they may be enabled to pro-

duce

YSU Se fOr al eae Ee eh OD a Serie ar ol (ae MRE

heir

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than.

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er to
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were
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y, by
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reafon
Jy and

es the
which
r con-
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nds to
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of the
ily en-
Hivifion
0 pro-
duce

THE WEALTH OF NATIONS.

duce the groateft quantity of work poffible. For the fame reafon,
he endeavours to fupply them with the beft machinery which either
he or they can think of. What takes place among the labourers
in a particular workhoufe, takes place, for the fame reafon, among
thofe of a great fociety. ,The greater their number, the more they
naturally divide themfelves into different claffes and fubdivifions of
employment. More heads are occupied in inventing the moft
proper machinery for executing the work of each, and it is, there-
fore, more likely to be invented. There are many commodities,
therefore, which, in confequence’of thefe improvements, . come
to be produced by fo much lefs labour:than before, that the in-
creafe of its price does not: compenfate the diminution of its quan-
tity, ) 3

wor

CHAP.
VIII.
eyed

BOOk:
eats

THE NATURE AND CAUSES OF

CHAP. IX.
Of the Profits of Stock.

HE sifé and fall in the: profits of ftock depend upon tie

- fame caufes with the: rife and fall in the wages of labour;.

the teasbiing or declining ftate of the wealth of the fociéty; but
thofe caufes affect the one and the other very differently.

Tue increafe of ftock, which raifés wages, tends to lower
profit. When the ftocks. of many rich merchants are turned into
the fame trade, their mutual competition naturally tends to: lower
its profit; and when there:is a like increafe of ftock in all. the dif-
ferent trades carried on in the fame: fociety, the fame competition. .
muft produce the fame: effect in them. all.

Ir is not eafy, it hag already. been: obferved, to aftertain what
are the average wages of labour even in a particular place, and: at:
a particular time. We can, even in this cafe, feldom: determine:
more than what are the moft ufual wages. But even this. can:
feldom be done with regard to: the: profits of ftock. Profit. is fo:
very fluctuating, that the perfon who carries on a particular trade:
cannot always tell you. himfelf what is the average of his: annual
profit. It is affeéted, not only by every variation of price in. the:
commodities which he deals in, but by the good or bad fortune:
both of his rivals and of his cuftomers, and by a.thoufand other

accidenta

THE WEALTH OF NATIONS.

aecidents to which goods when carried either by fea or by land, or CHAP.
even when ftored in. a warehoufe, are liable. It varies, therefore, —\—~

not only from year toyear, but from day to day, and almoft from
hour to hour. ‘To afcertain what is the average profit of all the
different trades carried on in a great kingdom, muft be much more:
difficult ; and to judge of what it may have been formerly, or in
remote periods of time, with any degree of precifion, muft be al-
together impoffible.

But though it may be impoffible to deterntine, with any degree
of precifion, what are or were the average profits of ftock, either
in the prefent, or in antient times, fome notion may be formed of
them: from the intereft of money. It may be laid down. as a
maxim, that wherever a great deal can be made by the ufe of
money, a great deal will commonly be given for the ufe of it;
and that wherever little can. be made by it, lefs will commonly. be
given for it. According, therefore, as the ufual market rate of
intereft varies in any country, we may be affured that the ordinary:
profits of ftock muft vary with: it, muft fink as. it finks, and rife:
as it rifes. The progrefs: of intereft, therefore, may lead us to
fornt fome notion of the progrefs. of profit.

By the 33th of Henry VIII, all intereft above ten’ per ‘cent.
was declared unlawful. More, it feems, had: fometimes. bee»
taken before'that. In the reign of Edward VI, religious zeal pro-
hibited! all intereft. This prohibition, however, like: all others of
the fame kind, is faid to: have produced: no: effect, and: probably:
vather increafed: than: diminifhed the. evil. of ufury.. ‘Fhe: ftatute of
Henry VIII was revived: by the 13th of Elizabeth ‘cap: 8, and teh:
per cent. continued to be the legal rate of intereft till the 21ft of

_ Jnmes I. when it was reftriéted to. eight per cent.. It was reduced:

to:

THE NATURE AND CAUSES OF

to fix per cent. foon after the reftoration, and by the. 12th of
Queen Anne, to five per cent, All thefe different ftatutary regus’
lations feem to have been made with great propriety.. Théy feem
to have followed and not to have gone before the market rate af
intereft, or the rate at which people of good credit ufually borrowed,
Since the time of Queen Anne, five per cent. feems to-have been
rather above than below the market rate. Before the late war,
the government borrowed at three per cent. ; and people of good
credit in the capital, and in many other parts of the kingdom, at
three and a half, four, and four and a half percent.

Since the time of Henry VIII, the wealth and revenue of the
countty have been continually advancing,: and, in the courfe .of
their progrefs, their pace feems rather to have been gradually acce-
lerated than retarded... They feem, not only to have been going
on, but to have been going on fafter and fafter. The wages of
labour have been continually increafing during the fame- period,
and in the greater part of the different branches of trade and manu-.
faCtures the profits of ftock have been ‘diminifhing.

Ir generally requires a greater ftock to carry on any fort of
trade in a great town than in a country village. The great ftocks
employed in every branch of trade, and the number of rich com-
petitors, generally reduce the rate of profit in the forraer below
what it isin the latter. But the wages of labour are generally.
higher in a great town than in a country village. In a thriving
town the people who have great ftocks to employ, frequently can-
not get the number of workmen they want, and therefore bid
again{t one another in order to get as many as they can, which
raifes the wages of labour, and lowers the profits of ftock, . In the,
remote parts of the country there is frequently not ftock fuficient
to employ all the people, ‘who therefore bid againft one another in

order

eee we es — a eo eee

‘England, the market rate is rather higher. People of the beft

THE WEALTH OF NATIONS,

order to get employment, which lowers the wages of labour, and C :
raifes the profits of ftock.

In Scotland, though the legal rate of intereft is the fame as in

credit there feldom borrow under five per cent. Even private
bankers in Edinburgh give four per cent. upon their promiffory
notes, of which payment either in whole or in part may be de-
manded at pleafure. Private bankers in London give no intereft
for the money which is depofited with them. There are few trades
which cannot be carried on with a fmaller ftock in Scotland than
in England. Fhe common rate of profit, therefore, muft be
fomewhat greater. The wages of labour, it has already been
obferved, are lower in Scotland than in England. The country
too is not only much poorer; but the fteps by which it advances to

‘a better condition, for it is evidently advancing, feem to be much
flower and more tardy.

Tue legal rate of intereft in France has not, during the courfe
of the prefent century, been always regulated by the market rate.
In 1720 intereft was reduced from the twentieth to the fiftieth
penny, or from five to two per cent. In 1724 it was raifed to the
thirtieth penny, or to 34 percent. In 1725 it was again raifed

to the twentieth penny, or to five per cent. In 1766, during the
‘adminiftration of Mr. Laverdy, it was reduced to the twenty-fifth
penny, or to four percent. The Abbe Terray raifed it afterwards
to the old rate of five per cent. The fuppofed purpofe of many. of

thofe violent reductions of intereft was to prepare the way for
reducing that of the public debts ; a purpofe which has fometimes
been executed. France is perhaps in the prefent times not fo rich
a country as England; and though the legal rate of intereft has
4 in

THE NATURE AND CAUSES OF

in France frequently’ been lower ‘than’ in England, ‘the market
rate has generally been higher; for there,,.as, im other, countries,
they have feveral: very fafe and, eafy, methods.of evading the
law. The , profits of trade, J have been. affiared, by, Britifh, mer-
chants, who had traded, in bath countries, , are :higher in. France
than in England ; .and.it is no doubt upon, this,.account,.that many
Britith fubjects chufe rather to. employ, their capitals ;in.a country
where trade is in difgrace, than in one where it.is highly refpected.
The wages of labour are lower in France than in England. When
you go from Scotland to England, the difference which you may
remark between :the drefs and countenance of the common people
in the one country and in the other, fufficiently indicates the dif-
ference ‘in their. condition. The contraft is ftill greater when you
return from France. France, though no doubt a richer country
than Scotland, feems not to be going forward fo faft. It is a
common and even a popular opinion in the country that it is going
backwards; an opinion which, I apprehend, is ill founded even
with regard to France, but which nobody can pofflibly entertain
with regard to Scotland, who fees the country now and who faw
it twenty or thirty years ago.

Tue province of Holland, on the other hand, in proportion
to the extent of its territory and the number of its people, is a
sicher country than England. The government there borrow at
two per cent. and private people. of good credit at three. The
wages of labour are faid to be higher in Holland than in England ;
and the Dutch, it is well known, trade upon lower profits than
any people in:Europe. |The trade of Holland, it has been pre-
tended by fome: people, is decaying, and it may perhaps .be true
that fome particular branches of it are fo, But thefe fymptoms
feem:to indicate fufficiently that there is no general decay, When

7 : profit

PR FOWROL THAORA WAN ONGT
profit :dhwivithes,’ mercharite are ‘very ape’ to eoinplum ‘that wade:

decays ; xhough'the diminution of :profit is the natarebicfia of ity Uny~as

profperity;’ ‘oF of a gteater’ ftock' being employéd‘in-it ‘tharmbefore:
During the late war-the: Dutch ‘gained the whole carrying trate -of
Brante, of which: they’ ftill retain @ very targe fhare, \\"Phesgreat
property whieli they poffels’both ‘in the French and *Englith’ feitids,
abut forty millions,’ itis faid,’ in the Jatters {in which: Ifulpett;
however, ‘there is‘'a confiderable: exaggeration), ‘the’ great fums
which they: tend: td private people ‘in: cotintries ‘where the rate of
iviterett 49 ‘higher ‘thanin: their‘own,’ are’ ¢ireumftances»which no
doubt demon trate the “redundancy ‘of ‘their: ftoek, ‘or 'that:it:‘has
iricreafed beyond! what they cart employ-with tolerable profit inthe
proper bufinelg.of: theit-own: country ‘: but they do' not demonttiate
that:that bitfinefs ‘has: decreafed, “As the capital ofa private man;'
thoagh’ wexjuired By a ‘particular! trade}: mnfiy tnereafe ‘beyond what !
hican enttploy’tn' it; “and Ayét ‘that trade continue: to: ner ase
fo may likewife the capital ofa great nation.

Jy our, North American and, Weft, Indien, calbcile ieSa Not only

the. wages.of labour, but, ithe ,interett.of monsys:;and Se ute.
profits, of ftock are, higher, than in England. In the. different.
colonies beth the legal and the mar ket fate of. intereft run from | fix, ‘
tasight percent. High wages of labour and high: profits. of Stock.
ieee are things, perhaps, which fcarce ever £0! together, except,
ina @s,; pepuliar circumftances. of new colonies... _ A. new, om ;

mitt always for .fome time be more! underftocked. in, proportion. to.
the extent of its territory, and more underpeopled, i in proportion,
to the extent of its ftock, than the greater part of other countries. _

They have more Jand than they have ftock: to _gultivate, What.
they have, therefore, is applied to the cultivation only of what i is,

moft fertile and moft favourably fituated, the lands near the Tea :

fhore, and along the banks of navigable rivers. Such land too is.
frequently purchafed ‘at a price below the value even of its natural
Vou, I, Q_ produce,

aig THE NATURE AND CAUSES OF

GOK produce. : tho, purchele nro Of
a fark land: int a FRE ya a a pently afford,
eo to pay.a-very large interet. Ite cagid accumulationin £0

wp employment fuables the planter to increafe the numberof ihia

bands fafter than he can Gad them, in a now,feitiement,. Taale

whom he can find, therefore, are, very, liberally rewarded, As the

colony increafes, the profits of ftock gradually dimigith. When

the moft fertile and bet fituated lands have been,all ‘egcupied,, kee

profit.can be made by the cultivation of what is .inferier both ia

foil and fituation, and.le{s interet. can, be afforded for the ftock: which

is fo.employed. In. the gueater. part, of our colonies, acconingly,

both thelegal and the market, rate. of, intereft, have. been..confiders

ably reduced during the courfe of the. prefent.century. As. iches,

improvement, and population have imoreafed, intereft haa declined,.

The, wages of labour do.not.fink wish,the, prota nbihogke., she

demand for Jabour increafes: with the ,increale of ftock whateyer be

its profits; and after thefe are diminithed, ftock may met only

continue to increafe, but to increafe much fafter than before,. It

is with indwftrious nations. who are ‘advancing in the acquifition.of

riches, . as owith induftrious. ialividuals. | A great Rock; - shough

with fmalt ‘profits, generally inoteafes falter than-a final? ftock: with

_ girtat profits. Money, fays the proverb, makes money; When

you have gota little, ‘it is often caly to'get more. The great difi-

Cufty is to.get that little. ‘Fhe connevtion. er

_ figckandi-that of indeltry, or of the demand for silefl (latiuig!

has partly been explained already, but will be explained more filly
hereafter in Geert ef the ‘accumulation af ftock.

—F = = wt et Se am

“3 83

Tue acquifition of new tertitory, or of new branched Of trade,
thay fometimes raife the profits of ftock, and with ‘them the in-
tereft of money, even in a country which is fatt advancing in the |
acquifition of riches. ‘The ftock of the country not being fufficient

& for

THE WEALTH OF NATIONS.

its

for the whole acceffion of bufinefs, which fuch acquifition. prefent © H }P.
to the different people among whom it is divided, is applied to —~—~

thofe particular branches only which afford the greateft pro‘t.
Part of what had before been employed in other trades, is neceffa-
rily withdrawn from them, and turned into fome of the new and
more piofitable ones. In all thofe old trades, therefore, the com-
petition comes to be lefs than before. The market comes to be
lefs fully fupplied with many different forts of goods. Their price
neceflarily rifes more or lefs, and yields a greater profit to thofe
who deal in them, who can, therefore, afford to borrow at a higher
intereft. For fome time after the conclufion of the late war, not
only private people of the beft credit, but fome of the greateft com-
panies in London, commonly borrowed at five per cent. who before
that had not been ufed to pay more than four, and four and a
half per cent. The great acceffion both of territory and trade, by
our acquifitions in North America and the Weft Indies, will fuf-
ficiently account for this, without fuppofing any diminution in
the capital ftock of the fociety. So great an acceffion of new
bufinefs to be carried on by the old ftock, muft neceffarily have
diminifhed the quantity employed in a great number of particular
branches, in which the competition being lefs, the profits mutt
have been greater. I fhall hereafter have occafion to mention
the reafons which difpofe me to believe that the capital ftock of
Great Britain was not diminifhed even by the enormous expence
of the late war.

Tue diminution of the capital {tock of the fociety, or of the
funds deftined for the maintenance of induftry, however, as it
lowers the wages of labour, fo it raifes the profits of ftock, and
confequently the intereft of money. By the wages of labour being
lowered, the owners of what ftock remains in the fociety can
bring their goods cheaper to market than before, and lefs ftock

Qa2 being

116

THE NATURE’ AND CAUSES OF

ROOK being employed in fupplying the market than before, they can
ty—~ fell them dearer. Their goods coft them lefs, and they get more

for them, Their profits, therefore, being augmented at both ends,
can’ well afford'a large intereft.' The great fortunes fo fuddenly and
fo cafily acquired in Bengal and the other Britith fettlements in the
Eaft Indies, may fatisfy us that as the wages of labour are very
low, fo the profits of ftock are very high in thofe ruined countries.
The intereft of money is proportionably fo. Jn Bengal, moncy
is frequently lent to the farmers at forty, fifty, and fixty per cent.
and the: fucceeding crop is mortgaged for the payment. As the
profits which'can afford fuch an intereft muft eat up almoft: the
whole rent of the landlord, fo fuch enormous ufyry muft.in its
turn-eat'up the greater. part of thofe profits, Before, .the fall of
the Roman ‘republick, a ‘ufury of the fame kind feems to have
been common ih the provinces, under the ruinous adminiftration
of their proconfuls. ‘The virtuous Brutus lent money in Cyprus
at five and forty per cent. as we learn from the letters of Cicero.

In a country which had acquired that full coxaplement: of riches
which the nature of its foil and climate and its fituation with
refpect to other countries allowed it to acquire; which could,
therefore, advance no further, and which was not going back-
wards, both the wages of labour and the profits of ftock would
probably be very low. In a country fully peopled in. proportion
to what either its territory could maintain or its {tock employ,
the competition for employment would neceffarily be fo great as to
reduce the wages of labour to what was barely fufficient to keep up
the number of labourers, and, the country being already fully
peopled, that number could never be augmented, In a country
fully ftocked in proportion to all the bufinefs it had to tranfact,
as great a quantity: of ftock would be employed i in every, particular
branch as the nature and extent of the trade would admit, The

7 competition,

THE WEALTH OF NATIONS.

competition, therefore; would everywhere be as great, and ‘con-
fequently the ordinary profit as low as poffible.

Bur perhaps no. country has ever yet arrived at this degree of
opulence. China feems to have ‘been long ftationary, and had
probably long ago acquired that full complement of riches which

is confiftent with the nature of its laws and inftitutions. But

this complement may be much inferior to what, with'other laws
and inftitutions, the nature of its foil, climate, and fituation might
admit of. .A country which neglects or defpifes foreign commerce,

'?
Ck .P,
ao 7

and which admits the veffels of foreign nations into one or two —

of its ports only, cannot tranfact the fame quantity of bufinefs
which it might do with different laws and inftitutions. In a
country too, where, though. the rich or the owners of large capitals
enjoy a good deal of fecurity, the poor or the owners of fmall

capitals enjoy fcarce any, but are liable, under’ the pretence of

juftice, to be. pillaged and plundered at any time by the inferior
mandarines, the quantity of ftock employed in all the different
branches of bufinefs tranfaéted within it, can never be equal to
what the nature and extent of that bufinefs might admit. In every
different branch, the opprefficn of the poor muft eftablifh the.
monopoly of the rich, who, by engroffing the whole trade to them-
felves, will be able to make very large profits. Twelve per cent..
accordingly is faid to be the common intereft of money in China,
and the ordinary profits of ftock muft be fufficient to afford this:
large intereft.

A peFecT in the law may fometimes raife the rate of intereft
confiderably above what the condition of the country, as to:
wealth or poverty, would require. When the law does not enforce
the performance of contra¢ts, it. puts all borrowers nearly upon:
the fame footing with bankrupts or people of doubtful credit in:

better.

THE NATURE AND CAUSES OF

better regulated countries. The uncertainty of recovering his money
makes the lender exaét the fame ufurious intereft which is ufually
‘required from bankrupts. Among the barbarous nations who over-
‘run the weftern provinces of the Roman enipire, the performance
of contracts was left for many ages to the faith of the contracting
parties. The courts of juftice of their kings feldom ‘ntermeddled
in it, The high rate of intereft which took place in thofe
antient times may perhaps be partly accounted for from this
caufe,

Wuen the law prohibits intereft altogether, it does not prevent
it. Many people muft borrow, and nobody will lend without
fuch a confideration for the ufe of their money as is fuitable, not
only to. what can be made by the ufe of it, but to the difficulty
and danger of evading the law. The high rate of intereft among
all Mahometan nations is accounted for by Mr. Montefquieu, not
from their poverty, but paicly from this, and parily from the dif-
ficulty of recovering the money.

Tue loweft ordinary rate of profit muft always be fomething
more than what is fufficient to compenfate the occafional lofies to
which every employment of ftock is expofed. It is this furplus
only which is neat or clear profit. What is called grofs pro-
fit comprehends frequently, not only this furplus, but what is
retained for compenfating fuch extraordinary loffes. The intereft
which the borrower can afford to pay is in proportion to the clear
profit only.

Tue loweft ordinary rate of intereft muft, in the fame manner,
be fomething more than fufficient to compenfate the occafional
lofles to which lending, even with tolerable prudence, is expofed.
Were’ it not more, charity or friendfhip could be the only motives
for lending.

gt In

QO —* & se = mw be wm lull

S53 &

THE WEALTH, OF NATIONS.

. In a country which had acquired its full complement of riches, ©
where in every particular branch of bufinefs there was the greateft —~—~

quantity of ftock that could be employed. in. it, as the ordinary,
rate of cleat profit would be very {mall, fo the ufual market rate
of ‘intereft which could be afforded out. of it, would be fo low
as to render.it impoflible for any but the very wealthieft people
to live upon the intereft of their money. All people of {mall or
middling fortunes. would be obliged to fuperintend themfelves
the employment of their own ftocks, It would be neceflary that
almoft every man fhould be a man of bufinefs, or engage in fome
fort of trade. The province of Holland feems to be approach-
ing near to this ftate. It is there unfafhionable not to be a man
of bufinefs. Neceflity makes it ufual for almoft every man to be
fo, and cuftom every where regulates fafhion, As it is’ ridiculous
not to drefs, fo is it, in fome meafure, not to be employed, like
other people. As a man of a civil. profeffion feems aukward.in

a:camp or a garrifon, and is even in fome danger of being defpifed.

there, fo does an:idle man'among men of: bufinefs.

Tue highelt ordinary rate of profit may be fuch as, in the price
of the greater part of commodities, eats up the whole of what
fhould go to the rent of the land, and leaves only what is fuffi-
cient to pay. the labour of preparing and bringing them to market,
according: to the. loweft rate at which labour can any where be
paid, the: bare fubfiftence:of the labourer. The workman mutt
always have been fed in fome way or other while he was about the
work ; but: the landlord may not always have been paid. The

profits of the trade which the fervants of the Eaft India Com-.

pany carry on in Bengal may not perhaps be very far from this
rate.

Tue proportion which the ufual market rate of intereft ought:
to. bear. to the ordinary rate of clear profit, neceffarily varies as
profit

11g

HAP.
IX

t20

THE NATURE AND CAUSES OF

BOOK profit rifes or falls, Double intereft is in Great Britain reckoried,
_=—~—s what the merchants! call) a good, moderate, reafonable: profit ;

terms which F appreherid nican no more than a ¢ommon and
ufual profit, Im a country where: the ordinary rate of clear profit
is eight or ten. per cent, it may: be reafonable that one: half of it
fhould go to intereft wherever bufinefs is carried on with’ borrowed
money. The ftock is at the rifk of the borrowet, who,: ai it
were, infures it to the-lender; and four or five per cent. may
in the: greater part of trades, be both a fufficient profit upon the
rif of this infurance, and a fufficient recompeiice for’ the trouble
of -employing the ftock. But the proportion between: intereft
and clear. profit might not be the fame in countries «where: the
ordinary. rate; of profit was either a: good deal lower, .or a goad
deal higher. If it were a good deal lower, one half of it perhaps
could not. be: afforded: for intereft ;.and more might be. afforded
if it were a good deal’ higher.

In countries which are faft advancing to riches, the low. rate
of profit may, in the price of many commodities, compenfate
the high wages of labour, and erable thofe’ countries to fell as
cheap as their lefs thriving neighbours, amofiz whont’ the’ wages of
Jabour may be lower.

75 Ya,

THE WEALTH OF NATIONS.

CHAP. X.

of Wes and Profit’ in’ the di ferent Employments of Labour and
. Stock.

HE whole of the ttl and _difadvantages of the dif-

ity

S Goathodl be either perfectly equal or camels ly tending
to equality. If in the fame neighbourhood, there was any
employment either evidently more, or lefs advantageous, than the
reft, fo many people would crowd into it in. the one gale, and fo
many. would delert, it in the. other, ‘that its advantages, would foon
return to. the level of other employments. This at leaft would
be the. cafe in. a, fociety, where things were left. to, follow their
natural courfe, where there was perfect liberty, and where every
man was perfeétly free both to chufe what occupation he thought
proper, and to change it as often as he thought proper. Every
man’s. intereft would prompt him to feek the advantageous: and
to fhun the, difadyantageous employment,

LECUTUE i} , re i ‘ t wi

- PecUNTARY ‘wages’and ‘profit,’ itideéd,’ are every where in Bus
rope extreamly ‘different 'accotding to: the different employments
of labour and ftock. © But: this difference arifes partly from certain
circumftances ‘inthe employments themfelves, which, either really,
or at leaft in the imaginations of men, make up for a fmall
pecuniary gain in fome, and counter-balance a great one in others ;
and partly from the policy of ‘Europe, which nowhere. leaves
things at perfect liberty.

Vou. I.

122

BOOK

THE NATURE AND CAUSES OF

Tue particular confideration of thofe circumftances and of
that policy will divide this chapter into two parts.

Paar L
Inequalities arifing from the Nature of the Employments them/elves.

PT HE five following are the principal circumftances which, fo
far as I have been able to obferve, make up. for a {mall
pecuniary gain in fome employments, and counter-balance a great
one in others: firft, the agreeablenefs or difagreeablenefs of the
employments themfelves ; fecondly, the eafinefs and cheapnefs, or
the difficulty and expence of learning them ; thirdly, the conftancy
or inconftancy of employment in them; fourthly, the {mall or
great truft which muft be repofed in thofe who exercife them ;
and, fifthly, the probability or improbability of fuccefs in them.

First, The wages of labour vary with the eafe or hardthip,
the cleanlinefs or dirtinefs, the honourablenefs or difhonour-
ablenefs of the employment. Thus in moft places, take the year
round, a journeyman taylor earns lefs than a journeyman weaver.
His work is much eafier. A journeyman weaver earns lefs than
a journeyman fmith. His work is not always eafier, but it is
much cleanlier, A journeyman blackfmith, though an artificer;
feldom earns fo much in twelve hours as a collier, who is only a
Jabourer, does in eight. His work is not quite fo dirty, is lefs
dangerous, and is carried on in day-light, and. above ground.
Honour makes a great part of the reward of all honourable pro-
feffions. In point of pecuniary gain, all things confidered, they
are generally under-recompenfed, as I fhall endeavour to fhow
by and by. Difgrace has the contrary effect. The trade of a

butcher

THE WEALTH OF NATIONS,

123

butcher is a brutal and an odious bufinefs ; but it is in moft places © me P.
more profitable than the greater part of common trades. The —-y—

moft deteftable of all employments, that of public executioner,
is, in proportion to the quantity of work done, better paid than
any common trade whatever.

Huntine and fifhing, the moft important employments of
mankind in the rude ftate of fociety, become in its advanced ftate
their moft agreeable amufements, and they purfue for pleafure
what they once followed from neceffity. In the advanced ftate
of fociety, therefore, they are all very poor people who follow
as a trade, what other people purfue as a paftime. . Fifhermen
have been fo fince the time of Theocritus. A poacher is every
where a very poor man in Great Britain. In countries where the
rigour of the law fuffers no poachers, the licenfed hunter is not
in a much better condition. The natural tafte for thofe employ-
ments makes more people follow them than can live comfortably
by them, and the produce of their labour, in proportion to its
quantity, comes always too cheap to market to afford any thing but
the moft fcanty fubfiftence to the labourers.

DisAGREEABLENESS and difgrace affect the profits of ftock
in the fame manner as the wages of labour. The keeper of an
inn or tavern, who is never matter of his own houfe, and who is
expofed to the brutality of every drunkard, exercifes neither a very
agreeeble nor a very creditable bufinefs. But there is {carce any
common trade in which a fmall ftock yields fo great a profit,

Seconpuy, The wages of labour vary with the eafinefs and

cheapnefs or the difficulty and expence of learning the bufi-
nefs,

R 2 WHEN

124

BOOK
ger ian

THE NATURE AND CAUSES OF

WHEN any expenfive machine is erected, the extraordinary
work to be performed by it, before it is worn out, it muft be ex-
pected, will replace the capital laid out upon it, with at leaft its
ordinary profits, A man educated at the expence of much labour
and time to any of thofe employments which require extraordinary
dexterity and fkill, may be compared to one of thofe expenfive
machines. The work which he learns to perform, it mut be
expected, over and above the ufual wages of common labour, will
replace to him the whole expence ef his education, with at leaft the
ordinary profits of an equally valuable capital. It muft do this too
in a reafonable time, regard being had to the very uncertain du-
ration of human life, in the fame manner as to the more certain.
duration of the machine.

Tue difference between the wages of fkilled labour and thof:
of common labour, is founded upon this principle.

Tue policy of Europe.confiders the labour of all mechanicks,
artificers, and manufacturers, as fkilled labour; and that of all:
country labourers as common labour. It feems to fuppofe that of.
the former to be of a more nice and delicate nature than that of:
the latter. Itis fo perhaps in fome cafes; but in the greater part
it is quite otherwife, as I fhall endeavour to fhew by and by. The
laws and cuftoms of Europe, therefore, in order. to qualify any
perfon for exercifing the one fpecies of. labour, impofe the necef-

fity of an apprenticefhip, though with different degrees of rigour

in different piaces. They leave the other free and open to every
body. During the continuance of the apprenticefhip, the whole-
labour of the apprentice belongs to his mafter. In the mean time
he muft. in many cafes, be maintained. by his parents-or relations,
and in almoft all cafes muft be cloathed by them. Some money too
is commonly given to the mafter for teaching him his trade, They
4 who

oft:

THE WEALTH OF NATIONS, 125

who cannot give money, give time, or become bound for more CHAP.
than the ufual number of years; a confideration which, though it —-\—
is not always advantagcous to the mafter, on account of the ufual
idlenefg of apprentices, is always difadvantageous to the apprentice.
In country labour, on the contrary, the labourer,. while. he is em-
ployed about the eafier, learns the more difficult parts of his bufinefs,
and his own labour maintains him through all the different ftages
of his employment.. It is reafonable, therefore, that in Europe
the wages of mechanicks, artificers, and manufacturers, fhould be
fomewhat higher than thofe of common labourers. They are fo
accordingly, and their fuperior gains. make them in moft places be
confidered:as a fuperior rank of people. This fuperiority, however,
is generally. very. fmall; the daily or weekly earnings of journeymen
in the more common forts of manufactures, fuch as thofe of plain
linen and woollen cloth, computed at an average, are, in moft:
places, very little more than the day wages of common labourers.
Their employment, indeed, is more fteady.and uniform, and the
fuperiority-of their earnings, taking the whole year together, may
be fomewhat greater. It feems evidently, however, to be no
greater than what is fufficient to: compenfate the fuperior expence
of their education.

EpvucarTion in the ingenious arts and in the liberal profef=
fions, is {till more tedious and expenfive. The pecuniary re-.
compence, therefore, of painters and fculptors, of lawyers and.
phyficians, ought to. be much. more liberal, and_it is fo accord-

ingly;

* Tue profits of ftock feem to be very little. affected by the eafi-.
nefs or. difficulty of learning. the trade in which it. is employed..
All the different ways in which ftock is commonly employed in.
great towns feem, in reality, to be almoft equally eafy and

equally .

126

THE NATURE AND CAUSES OF

B oe K equally difficult tolearn. One branch either of foreign or domef-
ey tick trade, cannot well be a much more intricate bufinefs than

another.

Tuirgiy, The wages of labour in different occupations vary
with the conftancy or inconftancy of employment.

EMPLOYMENT is much more conftant in fome trades than in
others. In the greater-part of manufactures, a journeyman may
be pretty fure of employment almoft every day in the year that he
is able to work. A mafon or bricklayer, on the contrary, can
work neither in hard froft nor in foul weather, and his employ-
ment at all other times depends upon the occafional calls of his cu-
ftomers. He is liable, in confequence, to be frequently without
any. What he earns, therefore, while he is employed, muft not
only maintain him while he is idle, but make him fome compenfation
for thofe anxious and defponding moments which the thought of
fo precarious a fituation muft fometimes occafion. Where the
computed earnings of the greater part of manufacturers, accord-_
ingly, are nearly upon a level with the day wages of common la-
bourers, thofe of mafons and bricklayers are generally from one-
half more to double thofe wages. Where common labourers earn
four and five fhillings a week, mafons and bricklayers frequently
earn feyen and eight; where the former earn fix, the latter often
earn nine and ten; and where the former. earn nine and ten, as. in
London, the latter commonly earn fifteen and eighteen, No {pecies
of fkilled labour, however, feems more eafy to learn than that of
mafons and bricklayers. Chairmen in London, during the fum-
mer feafon, are faid fometimes to be employed as bricklayers.
The high wages of thofe workmen, therefore, are not fo ‘much the
recompence of their fkill, as the compenfation for the inconftancy
of their employment.

A HOUSE

THE WEALTH OF NATIONS.

A House carpenter feerus to exercife rather a nicer and more
ingenious trade than a mafon. In moft places, however, for it
is not univerfally fo, his day-wages are fomewhat lower. His
employment, though it depends much, does not depend fo en-
tirely upon the occafional calls of his cuftomers; and it is not
liable to be interrupted by the weather.

Wen the trades which generally afford conftant employment,
happen in a particular place not to do fo, the wages of the work-
men always rife a good deal above their ordinary -proportion to
thofe of common labour.. In London almoft all journeymen ar-
tificers. are liable to be called upon and difmiffed by their mafters.
from day to day, and from week to week, in the fame manner as:
day-labourers in other places. The loweft order of artificers,
journeymen taylors, accordingly earn there half a crown a-day,,
though: eighteen-pence may be reckoned the wages of common:
labour. In fimall towns and country villages, the wages of
journeymen taylors frequently fcarce equal thofe of common labour ;:
but in London they are often many weeks without employment,,
particularly during the fiummer.

WueEn the inconftancy of employment is combined’ with the:
hardfhip, difagreeablenefs and dirtinefs of the work, it fometimes.
raifes the wages of the moft common labour above thofe of the moft
fkilful artificers. A collier working. by the piece is fuppofed, at
Newcaftle, to earn commonly about double, and in many parts. of
Scotland about three times the wages of common labour. His:
high wages arife altogether from. the hardfhip, difagreeablenefs,
and dirtinefs of his work. His employment may, upon moft oc-
cafions, be as: conftant as he pleafes. The coal-heavers in Lon-
don exercife a trade which in hardfhip, dirtinefs, and difagreeable~
nefs, almoft equals that of colliers; and from the unavoidable:
7 : irregularity.

r28

THE NATURE’ AND iGAUSES: ‘OF

BOO irregularity’ in ‘the artivals ‘of coal {hips} the ‘employment ofthe
—— greater part of them’ is neceflarily very inconftant. \ If*¢olliers,

therefore, commonly earn double and triple the wages of common
labour,’ it ought not to feem unreafonable that coal-heavers fhould
fornetimes earn’ four “and five’ times thofe*weges:*' In the ‘enquiry

‘made into theit ‘condition a‘few years’ago; it’ was-found- thatiat

the rate at which they were then paid, they could earn front fix
to ten fhillings a-day. Six fhillings are about four times the wages
of common labour in: London, and: in-every particular tradey the
loweft. common:earnings may: always. be confidered as:thofevof the
far greater number, How extravagant foever thofe earnings may
appear, if they were more than fufficient to: comipenfate:all:the
difagreeable . circumftances of the bufincfs, there would foon»be
fo great. a number of competitors as,» in a trade »'which:has
no exclufive privilege, would quickly reduce them to 2»lower
rate.

Tue conftancy..or inconftancy of employment cannot), affect
the ordinary profits of ftock in any particular trade. Whet' smthe
{tock is or is not conftantly employed depends, not upon the trade,
but the trader. ~

FourTuiy,, The wages of, labour vary cri to the, {mall
or, great truft which muft be repofed i in the workmen...

) : { Bint) ii
» Te wages of goldfmiths and jewellers are. every’ where duperiar
to thofe of. many other workmen, not only of equal, but .of much
fuperior, ingenuity; on account of the. precious.materials with; which
they are intrufted, : ate

BL Yond
We itruft: our health to the »phyfician; our fortune and fome+
times our life and, reputation to the lawyer. andiattornéy.): ‘Such
_ sonfidénce

THE WEALTH OF NATIONS. 129

confidence could not fafely be repofed in people of a very mean or CHAP.
low condition. Their ward muft be fuch, therefore, as may Gy—w
give them that rank im the fociety which fo important a truft re-
quires. The long time and the great expence which muft be
laid out in their education, when combined with this cir-
cumftance, neceflarily enhance ftill further the price of their la-
bour.

Wuen a perfon employs only his own ftock in trade, there is
no truft; and the credit which he may get from other people,
depends, not upon the nature of his trade, but upon their opi-
nion of his fortune, probity, and prudence. The different
rates of profit, therefore, in the. different branches of. trade,
cannot arife from the different degvees of truft repofed in the
traders.

Frrrazy, The wages of labour in different employments
vary according to the probability or improbability of fuccefs in
them. :

Tue probability that any particular perfon ‘hall ever be qualified
for the e:.ployment to which he is educated, is very different in
different occupations. In the greater part of mechanick trades,
fuccefy is almoft certain; but very uncertain in the liberal profef-
fions. Put your fon apprentice to a fhoemaker, there is ittle
doubt. of his: learning to make a pair of fhoes: But fend him to
ftudy the law, it is at leaft twenty to one if ever he makes fuch
proficiency as will enabie him to live by the bufinefs, In a per-
fectly fair lottery, thofe who draw the prizes ought to gain all
that is loft by thefe who draw the blanks. In a proféffion
where twenty fail for one that fucceeds, that one ought to’ gain
all that fhould have been gained’ ag unfuccefsful twenty. The
Vou. I. counfellor

THE) \NATURE) AND) CAUVSES|\OF

his a K counfellor at.law, who, iperhaps, .qt-near forty years of:ages ibegins:

to make fomething by-his, profeffion,; ought, to. xeceive ithe iretribu-
tion, not only of, his,own.fo, tedious and: expenfive!, education; : but:
of that of more than twenty others, who are neyerlikely: to make
any thing by it; How extravagant foever the: fees of counfellors at
law may fometimes appear, their real retribution: is never equal
to this, Compute in. any particular place, what is likely to be
annually gained, and what is likely to be annually, {pent, by all the
different workmen in any common trade, ;fuch as that of fhoemakeis
or weavers, and. you. will find, thatthe; former fara willigenevally:
\ exceed the latter. . But make, the fame. computation with regard ‘to
all the counfellors, and, ftudenta of;law;:,in all thedifferent-inits of
court, and you will find. that, thein, annual gains bear:but:avery
{mall proportion, to. their. annual expence, ever though | yow rate
the former as high, and the latter, as,,low, as. can -well/-be sdone,
The lottery of the law, therefore, is very far’ from being a
perfectly fair lottery; and. that, as well,.as, many. other Jiberal
and: honourable profeffions, .. are,,, in, point.\ of pecuniary, -gain,.
evidently. ‘under-recompenced, ‘bis

aah

., Tose profeflions keep their level, however, with other’ oc¢u-
pations, and,, notwithftanding thefe difcouragements, ‘all the moft
generous, and liberal fpirits are eager. to .crowd:into thems: ‘Two
different, caufes contribute. to. recommend them.:: : Pirft, the-defite
of. the. reputation, which. attends, upon fuperior excellence ‘in: any.
of. them; and, fecondly, the natural; confidence which everyman
has more or lefs, not. only in his own ites but.in his:own. paki
fortune, ,

To excel in any profeflion, in which. but few arrive’ at medio.
crity,:is the moft.decifive mark of what is called’ genius or fuperior
pale The. publick admiration: which attends upon fuch ‘dif
sioctt tinguithed

a, a. ee ane ae a ha ae ee

THE WEALTH OF NATIONS,

tinguithed) abilities; makes always a part-of their reward ; @ greater Cc ns P.
or fmaller| in: proportion ‘as’ it-i¢ higher ‘or lower in degree. It —-y—w

makes‘a’ confiderable’ part‘ of it in’ the ‘profeffion of phyfick; a
ftill.greater\perhaps in that of law; in poetry and philofophy
it conn tee the whole. OL | 374

Tuere are fome very dgtebatle and beautiful talents of which
the poffeffion commands a certain fort of admiration ; but of which
the exercife for the fake’of gain is confidered, whether from reafon
Of prejudice, ad'a fort of publick proftitution. ‘The pecuniary re-

«compence;! therefore; ' of thofé! who’ exercife them in this manner,

mutt: be: fufficient, not!'only to’ pay for the time, labour, and
expence ofiacquiring the talents,’ but for the’ difcredit which attends
the employment of them’ as‘the ‘mearis of fubfiftence. The exor-
bitant srewards of: players, opera-fingers, Operasdancers, &&c. are
founded upon thofe two principles ; the rarity and’ beauty of the
tulents;and the diferedit of employing them in this manner. It
feems abfurd at firft fight ‘that we fhould defpife'their perfons, and _
yet reward their talents with the moft’ proftie liberality. “While
we do the one, however, we mutt of neceffity do the other.
Should the publick.opinion or prejudice ‘ever alter with ‘regard to
fuch occupations, their. pecuniary® recompence would ' quickly
diminith,.,,\More; people would-apply to them, ‘and the competition
would, quickly: reduce: the :price’.of their labour. ° ‘Such’ talents,

though far, from: being common,’ are by’ rio’ means’ fo rare’ as is

imagined. Many:people poffefs them in great perfection, who dif-
dain to,make this ufe :of.them ; and many more are capable of
acquiring them, if any thing could be made honourably by them.

THz over-weening’ conceit ‘which the’ greater part: of men have
of their own, abilities, isan.antient evil remarked. by the philofoa
phers and moraliftsof all ages... Their abfurd prefumption in
fh. S 2 their

1292

THE ‘NATURE AND CAUSES:'' OF

By ‘OK ‘their own good fortune, has been tefs taken’ notice of. | Its, sHow-
tegen ever, if poftible, ftill:more wniverfal. | There is no man: living
who; when in tolerable health and fpirits, has not fome: thare of
‘it. ‘The chance:of gain is by every man more'or lefs over-valued,
and the chance of lofs is by moft'men under-valucd, ‘and ‘by fearve
any man, who is in tolerable health and fpirits, Sopa more than
‘dt is worth,

TnHat the chance’ of ' gain is naturally’ overvalued; ‘we may
learn from the univerfal fuccefs\/of lotteries.’ The world ‘neither
ever faw, nor ever will fete, a perfeétly fair lottery ¢ or one'm which
‘the whole gain compenfated the whole of; becaufe the undertaker
could make nothing’ by it. In’ the ftate lotteries the tickets are

really not worth the’ price whieh is ‘paid’ by the original eae

and yet commonly fell’ in the ‘market for twenty, thirty,’ “and
fométimes: forty per cent. advati¢e.. The vain hope of gaining
fome of the great prizes is the fole caufe: of this demand,’ ‘Tie
fobereft ‘people farce look ‘upon it as ‘a folly'to: pay a fall fain
for the chance of gaihing tén or twenty. thoufand pounds ; Fs ‘though
they know that even that {hall fum is, perhaps twenity or thirty |

cent. more than the chance is worth. Ina lottery in which. no: ze

exceeded twenty pounds, though in other refpects it approached
much nearer to a perfectly fair one than the common ftate lot-
teries, there would not be the fame demand for tickets. In order
to have a better chance for fome of the great priaes, fome people
purchafe feveral tickets, and others, fmall fhares in a ftill greatdr
number, There is not, however, a more certain propofition in
mathematicks than that the more tickets you adventure upon, the
more likely you are to be a lofer. Adventure upon all the tickets
in the lottery, and you lofe for certain; and the greater the number
cf your tickets the nearer you approach to this certainty.

Tua?

"0. D Oye a> aA Ss se we Be Be wae ee

‘THE! -WEALTH OF NATIONS,

233

~ (Tra ithe. chance of lols) is frequently undervalued; and fearce © HA'P.
ever! valued more than, it is: worth, wemiy learn from the very ==

moderate profit of infurers. In order to make infurance, either
from fire or fea rifk, a:trade at.all, the common premium, mutt be
fufficient |to compenfate the common loffes, to pay the expence of
management, and to afford fuch.a profit as might have been drawn
from an. equal capital employed'in any common trade... The perfon
who pays no more than this, evidently pays.no more than the real
value of the rifk, or the. lowelt price at which he can reafonably expect
to infure it., But though many. people have made a little money, by
infurance,, very few have made a,great fortune; and from, this confi-

deration, alone it {eems evident enough that the ordinary balance af’

profit, and lof is not more advantageous in, this.than in. other,com-
mon trades by. which, fo, many people make, fortunes, Modgrate,.
however,, as the premium of infurance. commonly, is, many, people:
defpife the rifk, too much. to care. to pay it. Taking the whole:

kingdom. at an average, nineteen houtes i in, twenty, or rather pers .

haps ninety- nine in a hundred, are not infured from fire. Sea:
wiki is more alarm ing: to, the greater part of people, and the pro-
‘portion of thips “infured to thofe: not ‘infared is much greater...
Many, fail, however, at all feafons and even in time of war, with--
out any infurance. _ This may.fometimes, perhaps, be done without
any imprudence, When a great company, or even a. great. mer-
chant, has twenty or thirty hips at fea, they may, as. it Were,
infure one another. The. premium faved upon. them: all, may’
more than compenfate fuch loffes as they are likely to meet with in:
the common courfe, of chances. The neglect: of infurance upoh
fhipping, however, in the fame manner as upon houfes, is, in:

moft cafes, the effect of no fuch nice calculation; but of. mere:

thoughtlefs rafhnefs and sea a contempt of the. rifk,

Tue contempt of tifk and the: prefumptuous hope of ‘fuccels,.
are in no period.of life more active than at the.age at. which young:

people.:

334

THE, NATURE, AND. CAUSES QF

BOOK people chufe their, profeffions, .., How, little. the fear..of misforane
tom is then capable of ;balancing the hope of good luck, appears, fill
more evidently in the readinefs of the common people to enlift,.as
foldiers or to go. to fea, than in the cagernefs, of thofe ,of better
fathion to SA into, what, are called the liberal peakeianss rarite

‘4
te

ot s168 esgnw tied’ 5 and, wetenonrit
Waar a common Soldier, may Jlofe is obvious enough: ; Withs
‘out regarding the danger, . however, young volunteers never enlift
fo readily. as,.at the beginning of | a; new. war ;..and; though; they
have, fearceany' chance /of-preferment, they:figure to them#felues: ia
their-youthfulfancies:a thoufand: occafions of acquiring honour'and
diftinétion which never occur. ‘Thefe' romantick hopes! ‘make"'tlié
whole price’ oftheir blood.’ ‘Their pay is lefs than that of common
Sabourers; and in ‘aétual fervice their fatigues are’ much greater!)
Tue lottery of the fea is not altogether fo difidvantageous as
that of the army. The fon of a creditable labourer or ‘artificer
may frequently go to fea with his father’s confent ; but if he enlifts
as a foldier, it is always without it.’ “Other people fee fome chance
of his ‘making fomething by the one trade’: Nobody: but hithieif
fees any of his making any thing by the other. ‘The’ Bieat
admiral is lefs the object of publick admiration than the’ great
geneval, and the higheft fuccefs in the fea fervice promifes a ‘leis
brilliant fortune and reputation! than equal ‘fuccefs in’ the land.
The fame difference runs through all’ the inferior degrees of prefer~
ment in both. By the rules of precedency a captain in the navy
ranks with a colonel in the army: but he do¢s not rank with him
in the common eftimation. A’ the great prizes in the lottery are
lefs, the {maller ones muft be more numerous, Common failors,
therefore, more frequently get fome fortune and preferment’ than
common foldiers ; and the hope of thofe prizes is what principally
recommends the trade. Though their fkill and dexterity are much
fuperior

~~ A «se Ff hee ee

=s- @B

SPH E! WRALTH OF ‘NATION'S:

133

Feperio'ts that! oF alnoftuny"Attificers;: did’ though their whold CHAP.
life-is rié‘Vontinual’ feene of hardfhip arid’ dahger; yet for all'‘this an

dexterity and/fkill) fox “all thofé' hatdthips and dangers, while they
remain’in the <oridittort of’ common failors, ‘they receive fcarce any
other recoifipetted ibuit “the - pleafare’ of exercifing the one and of
furmounting the other. Their wages are not greater than thofe
of common: labourers‘at the port \whicly' regulates the rate’ of fea~
imens wages.’ “Asithey are: continually: going’ from’ port to port;
the monthly pay’of thofe’ who: fail from: ‘all ‘the! ‘different’ ports of
Great Britain ,“is more nearly:upon a‘ level than ‘that‘of any’ other
workmen, in: thofe different:places ; and the rate of the port to and
from which..the greateft. number fail, that is. the port .of London,.
regulates that of all, the. reft.... At London the wages:of the, greater’
partiof,the different clafles.of workmen are, about, double. thofe of
the fame claffes at Edinburgh. But the failors who fail from the
port of London, feldom earn above three or four fhillings a month:
more than thofe who fail from the port of Leith, and, the. difference:
is frequently not fo great. In time of peace, and in the merchant
fervice, the London pr ice is froma guinea to about feven and:
twenty fhillings the calendar month, A common, labourer in
London, at the rate of nine or ten fhillings a, week, may earn in:
the ‘calendar. month, from. forty to five and forty, fhillings. The:

failor,. indeed, over. and above his pay, is fupplied with provifions.

Their value, however, may not perhaps, always. exceed the. diffe-
rence, between his pay and that. of the common. labourer ; 3, andi

though it fometimes fhould, the. excefs. will not be clear gain to-
the failor, becaufe he.cannot fhare it with his wife and. family,

whom he mutt maintain gut. of his wages at home.

“Tue dangers and hair-breadth efcapes of a life of adventures,
inftead of difheartening young people, feem frequently to recom-
mend a trade to them. A tender mother, among the inferior:
ranks:

THE NATURE AND CAUSES OF

ranks of people, is often afraid to fend her fon to. fchaol at a fea-
port town, left the fight of the fhips and the converfation and
adventures of the failors fhould entice him to go to fea. The
diftant profpect of -hazands, from, which we.can, hope to extricate
ourfelves by courage and. addrefs,.is not ,difagreeable ta us, and
does! nok .raife the wages, of labour \in. any employment, I¢ is
otherwife with thofe.in which courage and addrefg can be of no
avail, In trades which. are known.;to be very unwholefome, the
wages of labour are, always remarkably. high. Unwholefomenefs
is a fpecies pf difagreeablenefs, and. its effects, upon the wages of
labour. are.to be ranked: under that general head.

Iw all the different anid of ftock, the ordinary rate of
profit: Waites Widré r'lefs' with | the certainty or’ uncertainty of the
returns.’ Thefe'are'in' general lefs uncertain’ in the inland than in
the foreign trade, and in fome branches of foreign trade than in
othérs ; in the trade to North America, for example, than:in that

to Jamaica.’ The ordinary rate of profit always rifes more‘or lefs
withthe rifk, It does not, however, | feem to rife.in iproportion
to it, ‘or fo as to compenfate it compleatly. Bankruptcies are
moft frequent in the moft hazardous trades. The) moft ‘hazardous
of all trades, that of a fmuggler, though when the. adventure
fucceeds it is likewife the moft profitable, is the infallible road to
bankruptcy. The prefumptuous hope of fuccefs , feems.to act here
as upon all other occafions, and to entice fo many adventurers into
thofe hazardous trades, that’ their competition reduces the profit
below what is fafficient to compenfate the rifk. To compenfate it
compleatly, the Common returns ought, over and above the ordi.
nary profits.of ftock, not only to make: up for all occafional loffes,
but to afford a furplus profit to the adventurers of the fame nature
with the profit of infurers, But if the common seturns were fuf-

7 ficient

PH IMAL PY A}ORINETION ST

FiefOne fir a this,? Barleriptches would nat~the waved a Sem
effete efatt Sy Getier ‘tnekdee aertelt or dos wi 5, ios
sn Bob ae ON) EN erat ER Boambee FA) ace hep peavey
Pde iver, sien ety the sgn at
ai 216 SHY AEE” tHe profits GF Hoek} he ‘agreenblenelt! or
tiga F'thte afiritts “atid ‘tHe riffe or fectirity-with whieh
it 18 attehided. ik poih¢! of” agieabted tv difagrecableriely, whete
ig ittfe oF no difference “in thé far preter part “oF-ttieWiffetone
pags oyments ‘of flock’; ‘ut a grede' deal it thofe of labour ¢and
fre-oftlinary profit of ftock, though it Hites with ithe'ritk; “doe? not
Nai feem to rife’ in’ propettion! tot? Tt Poukd follow fron ll
this, that, in the fame fociety or. neighbourhood, the ‘average and
ordinary; 436s: of. profit: in the... diferept ‘employments. of. ftock
fatrukd bersmoroasarly upon a level fan the pecuniary, wages, of
» diffetent farte/of labour. »; They are fo, accordingly, ; The dif-
vr cemdy between: the earnings.of a,common labourer. and tho of
ssselbiemebset, lawyey, or, phyfigian,; i is evidently much: greater,
trdwothaty: between the ordinary: profits in. any two. different
beanehpsiof tvade.: Fhe.apparent.difference, ,befides, in the profits
of: diflervent.tradts, is generally a deception arifing from our, not
atwaysidiftinguihing what.ought to. be confidered , as aN from
what lp v8 Resenetes, as prefie le 7
O3 DEOL o Meany ply es yeo9uh
3% sAddactietiaation poaliti is he a acre, deaneing fomething
Unitornmdnly ‘extsavagant; ‘This great. apparent. profit, however,
i¢ frequently novmore than the reafonable wages of Jabour, The
fkilhof enapothceary) isa such, nicer and more. delicate matter
that that-of amy artificer whatever; and the traft whichis repofed
dt him i8of much greater importance. He is.the phyfician of the
‘poor inal cafes, and of the rich when the diftrefs or danger is
rot very greats: His reward, ‘therefore, ought to be fuitable to
‘His ‘#KiNl and his'truft, and it arifes generally from the price at
Vou. I. T which

137.

THE» NATURE AND :CAUSES ‘OF

which he fells :‘his: drags: ‘Brco the whole drugs) whiehy the: beft
employed apothecary; inca large market town, will fell) am ayear,
may not perhaps coft hinv above: thirty or forty: pounds): ‘Though
he fhould fe’! them, therefore, :for \¢hree or ;four hundred; orat.a
thoufand p : cent. profit, this may frequently be »no:mese-thanthe
reafonable wages of his: labour charged; in the only way. in’ which
he. can charge 'them,: upon ‘the price of his: drugs. The grezcer
part-of; the Sema Lswint is ie wens difguifed i in ‘the hai of
probity raat PLP Dee art sage YUBISIIg yt
y f ie Guoly es

In a {mall fea-poit, town, ai alittle grocer will Ean forty or. Sify
per cent. upon a ftock of a fingle ‘hundred: pounds, while. a .con-
fiderable: wholefale merchant. in. the fame place, will, fcarce| make
eight or ten per cent. upon,a ftock, of ten choufand, The: trade, of
the grocer may be neceffary. for the conveniency, of the, inhabitants,
and the narrownefs of the market may not admit the employment
of a larger capital in the bufinefs... The man, however; muft, not
only live by. his' trade, but live by. it fuitably to the.qualifications
which it, requires... Befides poffeffing ‘a’ little; capital, he muft-:be
able to.xead) iwrité, and account, and mutt, be a: talerable: indge
too of, perhaps; fifty or fixty different forts:of goods, their-prices;
qualities, and the markets wheie they: are. to‘ be had:¢heapeft, |. He
mutt have all the knowledge,’ in fliort,’ ‘that 18 neceffary-fore. great:
merchant, which nothing hinders -him,from becoming; but;; the:
want of a{ufficient:-capital.,.. Thirty'or forty pounds 'a year. cannot
be confidered as too great a recompence for, the-labour-of..a, perfon
fo accomplifhed. Deduct this. from the. feemingly- great profits of
his capital, and little more will remain,’ perhaps, thautheordinary
profits of ftock. The greater: part of the apparent profit is, in.
this café too, real wages.

Tue difference between the apparent profit of the. retail. and
that of the wholefale trade, is. much lefs in the capital than in
fmalk

THE WEALTH OF. NATIONS.

139

friall townsiiand: country: villages.:/:/Where ten thoufand pounds © us P.
canbe employed’ in the grocery trade, the wages of the grocer’s Ua

labour! make)but avery trifling addition to ‘the real profits :of fo
great.a ftock,:, ‘The:appareut profits of the wealthy retailer, there.
fore, are therecmore nearly; upon:salevel with thofeiof the wholefale:
merchan‘.; It is;mpon this account: that:! goods fold. by retail are
generally as cheap:and frequently: much :cheaper in:the .chpital than:
in fmall towns and: country: villages. ..: Grocery goods, for example,
are generally much cheaper ; bread and butcher’s-meat frequently
as cheap. It cofts no more to bring grocery goods to the great
town’ thaii‘to the ‘country village’; ‘but it ‘cofts ‘a ‘great ‘deal more

‘to bring’ corn: ‘and cattle, ‘as the'‘preater’ part of them muft be

brought’ from: a‘much greater diftance, ‘Phe ‘prime coft of grocery
goods, therefore; ‘being the fame in both ' places, they are cheapeft
where the 'leaft profit’ is‘charged: upon:them./' The'prime coft: of
bread‘ and 'butcher’s- meat ‘is: greater ‘in the great town than in the
country village 3'‘and though ‘the profit: is ‘lefs,: therefore, they are
not' ‘always |’cheapeér there,’ but often equally ‘cheapy« In {uch
articles’ as bread: and’: butcher’s-meat, thé fame’ caufe,. which
ditniniffies' apparent’ profit, ‘increafes: prime coft: “The: extent of

the’ market, by: giving: employment to 7 eater ftocks, ‘diminifhes:

ap; arent profits’ but! by requiring fupplies from: a greater diftance,
it increafesprime:coft. | This diminution of the one and -increafe
of the-other ‘feem, in moft' ‘cafes, nearly to counter-balance one
another j which is probably: the ‘reafon that, though the prices of

corn‘and' cattle are ‘commonly v-+v different in .different parts of

the Kingdom; thoft of bread’ and’ butcher’s-feat are aie ~~
nearly ii said tinal it ithe 'gfeater part of it. | ab «het
Yagtihdo

Tuovucn the profits of ftock both in the wholefale ‘and rete

trade are generally lefs in the capital than in fmall-towns and

country villages, yet. great fortunes are frequently acquired from

Tz fal]

THE NATURE AND CAUSES OF

{mall beginnings in the:fotmer, and: {carce ever in the Jatter. In
fehall tewns and country: villages, on account of the .narrownels,
of the market, trade cannot always be: extended as ftock extends.
In fuch .places, therefore, though the rate of a particular perfon’s
profits may b- zry high, the fum or amount of them.can never ‘be
very great, ne .orequently that of his annu-d accumulation. In
great towns, «mn: the contrary, trade can be extended as ftock
increafes, and -the credit of ..a: frugal and: thriving: man in-
creafés much fafter: thaw his ftock. »“His:trade is: extended in. pro~
Portion ‘to ‘the’ amount xf both, ‘and the fum or:amount of jhis
profits is/in proportion to the: extent.of his: :trade;: and his: annual
accumulation ‘in proportion to the dmoant of his profits; > It feldom
happens, howeve , that.great fortunes are:madeeven in great
towns by any one regular, eftablifhed, and well known branch of.
bufinefs, but in. confequence of a long life of induftry, fragality,
and attention. . Sudden fortunes, indeed, are fometimes made in:
fuch ‘places by what is called the trade of fpeculation. The fpe~
culative merchant exervifes no one regular, eftablifhed, or: well
knowa branch of bufinefs.. He-is a corn merchant this year, and
a wine merchant the next, anda fugar, tobacco, or tea merchant
the year after. | He ienters into every. trade when he forefees. that. st
is likely to be move than commonly profitable, and: he quits it
when he forefees that its: peofits are likely. to.ceturn to the level of
other trades. Elis profits and lofies, therefore, can. bear no regu-
lar propostion to thofe of any one: eftablithed and ‘well. known.
branch of bufinels.; | A hold adventurer may fometines acquire a
confiderable fortune by two or three fuccefsful {peculations ; but is
juft as likely to lofe oné by two or three unfaceefsful ones. This
trade can be carried on no where but ‘in great towns. It is only
in places of the moft extenfive commerce and cosrefpondence that
the intelligence, requifite for it can be had, ‘

Tue five: circumftances above sapMored, though they occafion
confiderable inequalities in the wages of labour and profits of ftock,
7 occafion

THE WEALTH OF NATIONS,

141

occafion none in the whole of the advantages. and, difadvantages, C HAP,
real or imaginary, of the different employments of either, |The seiaitiions

nature of thofe circumftances: is: fuch, that.they make up for a
fmall pecuniary gain in fome, and counter-balance.a great one in.
others: | pds

In order, however, that this equality may: take place in the
whole of their advantages or difadvantages, three things are re-
quifite: even where there is the moft perfect freedom... Firft, the
employments: mutt be well known and.long eftablifhed-in the neigh-
bourhood; fecondly, they muft bein their ordinary, or what may
be called their natural ftates and, thirdly, they;muft be the fole
-or principal employments of thofe who occupy them.

First, this equality can take place only in’ thofe employments
which are well’ known, a... have been long eftablifhed’ in the
neighbourhood. er

_ Were all other circumiftances are equal, wages are generally
higher in new than in old trades. “When. a projector attempts to
eftablifh a new manufacture, he mutt at firft entice his. work-
men from other employments by higher wages than they can either
earn in their own trades, or than the nature of his work would:
_ otherwife, require,. anda confiderable time mutt pafs away before:
he can venture to reduce them to the common level. Manufac-
tures for which the demand arifes altogether from fathion and
fancy, ate continually. changing, and feldom laft long enough to
be confidered as old eftablifhed manufactures. Thofe, on the con-
trary, for which the demand arifes chiefly from ufe or neceflity, are:
lefs liable to change, and the fame form or fabrick may continue
in demand for whole centuries together. The wages of labour,.
therefore, are likely to be higher.in manufactures of the former,

than:

142

THE NATURE AND CAUSES OF

BOOK than in thofe ofthe latter kind. Birmingham deals, chiefly in ma-
——s nufactures of the formet kinds Sheffield in-thofe of, the latter; and

the wages of labour in thofe two. different places, are’ {aid to be
fuitable to this difference in the nature of their manufactures.

Tue eftablifhment of any new manufacture, of any new branch
of commerce, or of any new prattice in agriculture, is always a
fpeculation, from which the ‘projector promifes himfelf extraordi-
nary profits. Thefe (Profits , fometimes are very great, and fome-
times, more frequently, perhaps, they 2 are quite otherwife; but
in general they bear no regular proportion to thofe of other old
trades in the neighbourhood. If the project fucceeds, they are
commonly at firft very high. _When the trade or practice becomes
thoroughly eftablifhed and well known, the oreRPHON reduces
them to the level of other trades.

SeconpLy, this equality in the whole of the advantages and dif-
advantages of the different employments of labour and ftock, can
take place only in the ordinary, or what may, be called, the natural
{tate of thofe employments, )

Tre demand for almoft every different: fpecies, of Jabour, is
fometimes greater and fometimes. lefs. than ufual., In, the one
cafe the advantages of the eniployment rife above, in the other
they. fall below the common level... The demand for country labour
is greater at’ hay-time and harveft, than during the greater part
of the years and wages rife with: the demand, | In time of war,
when forty or ‘fifty thoufand failors are forced from the merchant
fervice into that of the king, the demand for failors to merchant .
fhips neceffarily rifes with their fcarcity, and their wages upon
fuch occafions commonly rife from a guinea and feven and twenty
fhillings, to forty fhillings and three pounds a month. In a de-

caying

' THE WEALTH: OF NATIONS.

143

cayitig' manufaRtare, “on':the: contraby,/ many workmen, rather C HA P.
than ‘quit’ their'old> trade) !odre!contented» with» fmaller | wages. —=—

than’ would * — ber faitable to the! ‘nature of their employ-
ment,.°°) Ys

THE profits of ftock vary with the price of the commodities ‘in
which it is employed. As the price of any commodity rifes above
the ordinary, or ayerage rate, the profits of at leaft fome part of
the ftock that’ is employed in bringing it'to matket, rife’ above
their proper level, and as it fails ‘they fink! beldw it. All com-
modities are more or iefs liable’ to variations of price, but fome
are much more fo than others. ‘In all commodities which are pro-
duced by human induftry, the quantity of indaftry annually em-
ployed is neceffarily regulated by the annual demand, in fuch a
manner that the average. annual produce may, as nearly as
poffible,; be equal to the average annual confumption. In fome
employments, it has already been obferved, the fame quantity of in»
duftry will always produce the fame, or very nearly the fame quan-
tity of commodities.» In the ‘linen or woollen manufactures, for
example, ‘the fame’ number of hands will annually work: up) very
nearly the fame quantity of linen and woollen cloth. The: varia-
tions in the market price of fuch commodities, thereicve, can arife
only from fome: accidental variation in the demand.. ;:A. publick
mourning ‘faifes ‘the! price’ of -black:cloth,' But as: the demand,for
moft forts of plain‘linen and'woollen cloth is pretty uniform; {0 is
likewife ‘the’ price.'|. But there are other employments:in which the
fame quantity of induftry will not always produce the fame quantity
of commodities:'! The fame:quantity of induitry, for example; will, in
different'years, produce very different quantities of corn, wine, hops,
fugar, tobacco, &c.. The price of fuch commodities, therefore, varies
not only: with the variations of demand, but with, the much greater
and more frequent variations of quantity and is confequently ex
treamly fluctuating,. But the profit of fome of the dealers mut

neceffarily:

nat THE NATORE AND [CAUSES OF
Bo

kK meeeftirHy trite Wien THY price bP IRE i le
Te sists’ of the Spedtilacive! hitched “ae prineipiay employee abiett
foe domioditied.” He ehdeavbiirs' Ys Buy theme wp wher he'fore-
fees ‘that ‘their’ pric is” Wiely” to" Hie, ind to fell’ thény’ When “itis

likely to fall. {MOIS ldgow yo vinsh oll engine WeTs
ohomn dedi moth bivisse vlencheoto’ dottiodet

Turroty, “opis ality i i ‘the, hole of. the Aeigy 2s Ae
ie the e ao Tap Rock,
can take place, ‘only, Ga eth e mies or oot tein

of Shel Sh Sane tt « em, slay rise

fodw bin, yey doortery

sob ylbiebedvtheoyy
Wuew a perfon derives his fubfiftence from one ae employment,

which does not eccupy. the, greater, partiof his, times, 4. ib

vals of,; his leifimve he.ig often, willing, to, work. at.
Bs wages. than, would ener fait, di nas of the iid

- Ga a wae Sea Ga tte eas 2 ses &

sr a1 iin

"Emer, fill fabhitte in mah parts, of Scotland, a, of. ‘people
called Qotters;or Cottagets, though they.weng, more frequent, dome
years ago tham they.are now... They axe.a fort.of out-feryants of
the landlords! and, farmers... The ufaal reward which they ;receive
from their, matters is..a houfe,,.a fmall garden, fox, .pot-herbs,, as
much; ,grais as. will, feed, a,cow,|.and,. perbaps, jan) acue on two, ef
bad arable land. When their mafter has occafion for thein labour,
hegives them, befides, two pecksiof oatmeal a week, worth about
fixteen-pence fterling., During a great part sof the -year ho-has
little,os no eceafios for their labour, and the! cultivation,of their
own litte pofleffion ‘is, not, fafficient: to occupy. the time whieh: is
deft: at stheir,own-difpofal., When fuch occupiers were more.nu-
merous, than they -are at prefent, they are {aid to have been willing
to-give their fpare time for a very {mall recompence:to any ibody,
and ‘to have: wrought for lefs wages than other labourers. In an-

tient

THE WEALTH OF NATIONS, 145

tient times they. feem to have. been. common all over Burope. In CRAP
- countries.id cultivated and. worle inhabited,,. the greater, part. of venyiew

Landlords.and, farmers could not, otherwife provide themfelves with

the extraordinary. number of hands, which country labour requires

at certain feafons: The daily or weekly recompence which fuch

labourers occafionally received from their matters, was evidently

not the whole price of their labour, ‘Their {mall tenement made

a confidetable part of it.) This, daily or weekly recompence, how-

ever, feems to have been confidered as the whole, of it, by. many

writers ‘who have collected the prices of labour and provifions in

antient, times,.and who have taken asd in oo both as

pistes low, o

= =@ es * Beer ~ ese OO OT

‘

. Tat produce df fitch labour comes. Sresitity iia ta market

1 than would otherwifé be fuitable to its ndture. Stockings in many
ie parts of Scotland are’ knit much cheaper than they can any where be
Hi wrought upon the loom. . They .are the work, of fervants and la-
d bourers, who derive the principal part of their fubfiftence from
fome other employment. More than a thoufand pair of Shetland
ftockings are arinually imported into Leith, of which the price
of is from five-pence to feven-pence a pair. At Learwick, the {mall
ve capital of the’ Shetland iflands, ten-pence a day, I -have been af-
as fured, is a common pfice of common labour. In the fame iflands
lof they knit worfted ftockings to the value of a guinea @ pair and
a, age ;

ue } aor ve Le

as Tae fpinnitig of linen yarn is cabibuo on in Scotland ‘nearly in
ir the fame way as the knitting of ftockings, by fervants who are
is chiefly hired for other purpofés:'' ‘They earn but a'very fcanty ‘fub-
- fiftence, who endeavour to get their whole livelihood by either of
ng | thofe trades. “In moft paits of Scotland fhie is a good fpinner who

can earn twenty-pence a week,

+. Vou. I.

U In

146
BO K
es)

THE: NATURE’ AND ‘CAUSES 'OF

“Iv optilent ‘countries! the market ip génerally fo extenfive): that
any one trade is fufficient t& employ the-whole labour andiftotk<of
thofe who occupy it. Inftances of people’s living by one employ-
ment, and at the fame time desiving; fome little advantage from
another, occur chiefly in poor countries The following inftance,
however, of fomething of 'the' fame Rind is tobe found in the
capital of avery rich one. There is no city in Europe, I believe,
in which houte-rent is dearer than in London, and yet I

papital in which a furnifhed apart nt’ a be hivédr ed
Lodging is not. only much pte London’ eat in” atid tt
ie much cheaper than in Edinborgh at ttl Nigel san
and what may feem extraordinary, the dearnefs of howlé-tent nent
caufe of the cheapnefs of lodging. “The dearnefs’ of ' Kdufe-rent in:
London, asifes, not only from thefe caules which rénder it dear
ity alt great capitals, the dearnelo of labour, thie detitiels OF ait'the
materials of building, which ‘mutt aghn athrs heree &
gteat diftanee, and above all the’ dearnels’ of Rania

landlord ating the part of a mtonopolilt, and ieee toni
a higher rent for a hake acre of bait Yand in® a town, ‘tha
had for a hundred of the beft in the courttry; But it pris
from the peculiar rrantiers'atid cuftoins of i ‘phaptt, which iN
every. mafter of a family to hire a whole houfe from. to to bott m.

A dwelling-hovte, i in England means every ng, that is'c eg x
under, the fame roof... In France, ncteod th and | many oth pavts
of Europe, it frequently, means. no. more than. a fingle ‘fork te
tradefman in London is obliged to, hire.a whale, houfe. 4 jn. that pert
of the town where his cuftomers live. His fhep is upon the ground-
floor, and:he and his, family fleep.in the gasret;, and he, endeavours
to pay a part of his houfe-rent by letting thetwo middle ftories te
lodgers. He expects to.maintain his family by his trade, and not
by his lodgers, “Whereas, at .Paris.and, Edinburgh, .the people
who: let’ lodgings, have. eaaaii hy no other medns of fubfiftences
. and

et ae i A

| li dies | ce A clad

THE) WEALTH, OF: NATIONS.

andi the iprice of the lodging molt, pay;; not only, the, cent of the
pena Rome ge EN of. patente |

‘| p “afer Taj 1 i UMliloeneal

frONT Sani 6 oi94i PA TL!

ores “Qn wey
ot on | rudineguanlibven, sealed by the Paley of Bare.
vanlad #! oer
su CH are, the. inequalities} in ‘the. whole of the advantages and
vnstvadvantages of the different employments of labour and {i ck,
whigh, the, ¢lefed of any of the. Lod requifites above mentioned

KVOIUIS 8ro va

ont.occation, even, where, there. is the moft perfect liberty. But

the palicy of Europe, ‘by not leaving things at perfect liberty, oce
cafigns. other inequalities, of much: ‘Breater importance,

“An. does, this chiefly fi in the: ‘three following ways, Fir, by re-

ftraining the competition in fome employments to & {mailer num-
er than \ would otherwife be difpofed to enter ‘intc tism; fecondly,
joretios, it th others beyond what it naturally would “be;

ire, thirdly, ‘by, obftruéting the free circulation ‘of labour ‘and

both: from ¢mployment to employment and from ' ‘place to

plates ne rae et }
“Finst, The ‘policy of Europe oceafions a ‘very imtportant ine.
aality ‘i in the whole of the advantages and difadvantages of the
ra ‘employments of ‘labour ‘and -ftock, by ‘refraining’ the

‘competition: in‘ fome employments ‘to ‘a {maller number than might
cothierife he difpofed to hig into ther.

Tire exclifive privileges Of corpoiations are the principal meats
it h ssrcnt ufe of for this purpot. | .

‘

ThE exitagive privilege ‘of ‘an thasbponad trade ahecéfiatly
reftraing the’ cornpetition, in’ the town where it ‘is ¢ftablifhed,! to
U2 thofe

«47

CHAP.

geome

aap

THE) NATURES AND.) CAUSES | OF

BQAOEK thole, who. are, fraeef thetradesis Fo-haxe feredan apprenticelbry
‘temyee in the, town,,,under.a-matterproperly, qualified. iscommonly; the

neceflary requifite for, obtaining this freedgm.;,1 The, byenlawsy.of

the corporation. regulate , fometimes. the. number..ef apprentices
which any matter, is allowed to have, and almoft.always.the number
of years which.each apprentice is, obliged.to, :ferve..y,;Fhe intention

of both regulations i is to, reftrain, she cempetition to.a anuch,fmaler:

umber than’ might otiierwi rife be‘ difpoled: fo: enter, into, ithe: trade.
ps feta of the enor “of ‘apprentices teltrains:j itrdisegtly.

A lous ‘teh Hf Sree hip teftpaing simone inom ‘bat, a8
ose bh ing te cif of education. cord Si tians

@ Tpushh na by eager ene te mi A Ly :
oiliw Sheffield no matter cutler: carighave. more ‘than‘c one ‘apprentice
at @ time,’ by a bye-law of the: ‘corporation.’ In Norfolk and Nor-
with: re: matter: weaver ‘can have more than two apprentices, ttt
pain: of! forfeiting five pounds a: month to:thd king.,, No: mafter
hatter can:have more than two. ‘apprentices anywhere in, England,
or‘in the Englifh:plantations,:mnder* pain of; forfeiting five pounds
a:month;: half: to the king, andihalf to!him whal:thall; fue. in. any
courtiof;recowd.) Both thefe regulations,'though they ,haye; been
coiifirmed “by ‘a! publick law of: the: ‘kingdom, are’! evidently, , dic-
tated by the fame corporation fpirit which enaéted ‘the bye-law
of Sheffield.: The ilk weavers. in. London, had fearce, been, in-
corpofated’'a ‘year when’ they enagted a “pyeclaw fettraining any

matte? from having more than. two lappretitiees ‘ata ‘time, It Tee.

sia a ‘particnlat act of pachaenent to refcind this Bye-law,

-Sdvex years feem anticntly to have een} alt eae Burope,- the
ufual iterm»eftablithed for the duration of. apprenticefhips 4 ity, the
greater paitiof incorporated trades. ‘All fuch incorporations: ‘were
anticntly called univerfities ; ‘which’ indeed, is the proper Latin.
name. for :any. incorporation whatever,...The univerfity of {miths,
the univerfity of, taylors, &c. are expreffions which we ‘commonly

meet

a a ee ee ec a a ae

2 fF fe wo eS Ul OR et Am

THE WEALTH OF NATIONS.

meet with'in the obt charters of ainticrit-towns.. When thofe pars
ticular incorporations ‘which are now: peculiarly called univerfities
were firit eftablithed, the term of years which it was neceflary to
ftudy, ''in “order: to: obtain the: degreg of mafter of arts, appears
evidently to have'been copied from the’ term of iapprenticethip in
common trades; of which ‘the incorporations: were much more
antient. As to have wrought feven years under ‘a matter properly
qualified, was neceflary in order to intitle any perfon to become a
mafter and to ‘have himfelf apprentices in a common trade; fo to
have ftudied feven years ‘under a. matter properly qualified, was ne~
ceflary to entitle him ta become a matter, teacher, or doftor
(words antiently fynonimous) in the liberal arts, and to have
fcholars or apprentices (words likewife say ase to
ftudy under him.

349
CHAP,
oman

By the sth of Elizabeth, commonly called the Statute of Ap- - |

prenticefhip, it was enafted, that no perfon fhould for the future
exercife any trade,. craft, or ‘miftery at that time exercifed’ in
England, unlefs he had previqufly {érved to it an apprenticefhip of
feven years at leaft; and what before had been the bye-law of
many particular corporations, became in England the general and
public law of all trades carried on in market towns. For though
the words of the ftatute are very general, and feem plainly to
include the whole kingdom, by interpretation its operation has
been limited to masket-towns, it having been held that in
country villages @ perfen; may exercife feveral different trades,
sbough ha: has. not ferved a feven years apprenticethip to cach,
they being neeeMasy for the conveniency of the inhabitants, and
the numaber..of people. frequently not being fixficient to expe
each with a pasticulas fett of hands,

a
v

BY a trie interpretation of thie words too the operation of
this ftatute has been limited to thofe trades which were eftablifiied
Vou. I. U 3 in

THE: NATURES AND !CAUSES iOF

BOOK in Englind’ béfore’the'sthof Blizabeth, »drid shins’ inéver ‘beer
yw extended tofuch as have been introduced: ‘fince that time. :) This

limitation has’ given.\occafion to feveral diftinétions! which, ¢conr
fidered:as rules of :police, ) appear as foolifh:as: can well:be imagined:
It has. been ‘adjudged; for:example, that:a coach-maker ean: neir
ther himfelf make:nor employ journeymen to make his. coach
wheels, but muft: buy them: of a mafter wheel-wright;, this latter

trade. having been, exercifed.in England before. the «sth jof,\Elis ,

zabeth. Buta wheel-wright,': though) he: has.inever’ ferved);an
apprenticefhip :te a!:coach-maker,;; may either -himfelf |imake or

employ © journéymen: to make «coaches; the trade.of .a coach-

maker not being within the ftatute, becaufe not exercifed in
England ‘at the timewhen it: was made, . The.» manufactures of
Manchefter, Birmingham, and Wolverhampton,, are: umany, of
them, upon this account, not within the ftatute; not having been
exercifed in England’before the sth of Elizabeth.

In France, the duration of apprenticefhips is different in dif-
ferent towns and indifferent trades. In Paris, five years is the
term required in a great number; but before any perfon can be
qualified ‘to exercife the trade asa maifter, he muft, in many of
them, ferve five years more as a journeyman, During this latter
termhe is called the companion of his mafter,, and the term itfelf
is called his companionfhip. © =

Fr?
t

In Scotland there is no general law which regulates univerfally
the duration of. apprenticefhips: The term’is different in different
corporations.” Where iit is long, @ part of itmay generally be redeemed
‘by paying-a fmall'fine. In’ moft towns too ‘avery ‘final fine’ ib
fufficient to purchafe the freedom of any corporation. The! weae
vers of linen and hempen cloth,‘the principal: manufaétures ‘of
the country, as well as all other artificers Subfervient to them,
wheel-makers, reel-makers, &c., may exercife their trades in any

4 town

THE (WRAL TER, OF - NATIONS.

15%
ist
'

town compernte without, paying any fine... all, gowns, corpomte CHAP,
all jperfane.,are, Sr9q, t,o. buechaysrmeat ypon.any lad day.of event

the, week... hres, years ig: ia Scotland a. epmmon, term of, ape.
preqticethip, even, in fome. very, .nige trades, and in, general ‘know
of a9 papain sienna sits which ill laws. ave fo little
pena won w ortey en eiifooter ene je 19B9 D9

: inat ‘ololaiin OF ‘OF al Lbs. rpc ea "e it is. ie "Le
red and inviolable.” The’ ‘patrimon el ,@. poor man . hes in in the
ftrer eit aa aocy'of Hae ip hind, hime “from
caplet this ‘ftrength and *dententy in in Pe mannier he thinks
i er ieee Beige! tohis neighbour; is a plain violation of this.
genres prope It is):a manifeft encroachment! upon: the
erty Both’ va the workman, and: of thofe,who:might ‘be:
riba to employ hin): Assit hindersthe one from: working at;
what he thinks proper, fo it hinders. the other: from employing:
whont ‘they hin ‘proper, :\ To: judge whether |he lis fit‘to. be em
_ ployed, may furely:'be trufted ‘tor the diferetior: of the employers:
whote mitereft! it fo mauich-concerns, ‘The affeéted anxiety' of the:
pate Teft they thould. employ an improper pein is wsldecty
mpert ent anit is en i

THe infusion, of Jong enaaies. cam give ny. Security

that infuifficient workmanthip. hall not frequently: be expofednte,
publick fale, When this is done it is generally the: effect, of , fraud,,
and:onot of mability; and the longeft apprenticefhip can give no:
fecurity again fraud. Quite different regulations are neceflary
to prevent: this abuaf@, i The) fterling: mark upon ‘plate,rand. ‘the

ftamyps:.upon: linen, and: woollen cloth, give the purchafer mucle
greater fecusity than any ftatute of apprenticefhip. He generally.
looks at thefe, but, never thinks. it: worth while:to enquise whether:

the woskman had ferveda.feven years appreaticehip, font ll
1a HE

ea eres)

152

BOOK

THE’ NATURE’ AND CAUSES OF

- Tee inftitution of long apprenticeships: has no:tendency to: form
young people:tojinduftey, | tiAjounneyrtiaw wholworke by the ‘piece
is likely to be. indiftiious, becanfe: hesderives‘e bendfit: from every
exertion; of his: induftry,», Ani apprentice-is: likely to be:idke; and
almott: always; is. fo, beeau® he-hadino immediate interelt: tobe
otherwife.. In-)the. inferior employments; the fweets of labour
confift, altogether in the kecompenice of labour.:' They: who.are
foonett i in.a condition, to: cnjoy. the fweets of it, are. kely feonelt to
conceive, a.relifh for it, and toacquire, theearly habit of induftryay A
young, man. naturally, conceives; an aveniion:to dabour, when for a
long fime he receives, no, benefit. from i it): The boys ;who:are put
out apprentices from, publick charities are generally bound for intore’
than the ufual rishi of deny and he or turnout very
idle and, figs aes ve fi iON:

breacs tr eqyoibor te! 4

3 APPRENTICESHIPS were altogether shill to the antignfs.
The reciprocal duties of matter and apprentice ‘make a confiderable
article in every modern code, The Roman law is perféétly! fi filent
with: ling to thom, I know no Greek’ or Lath Word '(T might
venture, I: believe, *to affert that’ there is norie) which etprefies the
idea we now annex to the word ‘Apprentice, a fervant bound ‘to
work at’a particular trade for the benefit of ’2 mafter, during a
term of years,’ ‘upon condition ‘that the mafter’ fall’ teach’ him
that trade... et Pid

Lone apprenticefhips: are altogether unneceflary. .'The: arts,
which are much fuperior to common trades, fuch 7s thofe: of making
clocks and. watches, contain no fuch -myftery.as-to require.a long
courte of inftruction.. The fir invention: of fuch.beautiful:ma-
chines, indeed, and even that.of fome of the inftraments employed
in. making them, muft, no doubt, have been the work’ of deep
thought and long time, and may juftly be confidered as among tae

happieft

ae Fr we oO MRM 8BOOReEe OT US UE

“S @ ef

THE | WIRALTHS OF* NATIONS

happicht efforts: ofohumaminpenuityy | Buto'whero Both havetieen © che

faisly ariventted and-ate wellrwnderitood, .to!explain'toany; young Gaya
Many inthe dompleateft manner; howto apply theinftrumerite'and
how toticonftru& tHe machines; cannot well tequire: more than the
leffansiiofontfewr:Wweekws qperhaps:thoftuofoa few days might ‘He
fuffdiint)’ Inthe common:mecliqnick itrades, thofe‘of afew days
mighttertainly be fisfficient: “Therdenterity of hand, “indeed, vert
m comnidny trades; canriot” be aequired without much practice-and
éxperi¢tices (But! a! young than would hpradtife with: much snore.
diligence: andiattention;0 if ofrom® the i‘beginninig he “wrought! as
a'jqurneyman; / ‘being’ paid in‘ proportion’ ito'thellittle werk which ‘he
could ‘execute; ‘and:paying' in‘ his ‘tum: for the’ materials’ which he
might €ometiznes fpoil-through < wkwardudfs arid:inexperience,’ ‘His
education would’ generally in this way be more? effectual; and
always lefs tedious and expenfive. The mafter, indeed, would be
a lofér,.,,. Hg would lofe all’ the;wages: of..the apprentice, which, he
now. faves, for, feven, years. together,,;.'In thes; ends perhaps,
the 2 APPPENHCE,, himf{elf wouldbe, a lofer,,.In,a trade fo,eafily learnt
he would j haye Mere competitors, and jhis wages; ~hen he:came
to: bea. compleat workman, would, be much: lefs, thaw at prefent;
The fame increafe of Scmpetition would reduce. the. profits.of the
mafters as well as the wages: ‘of, the workmen, |The trades, : the
crafts, sp myfteries;, would all. ;be,lofers.:,. But, the public: would
be a gainer, the work of all artificers coming in this way,much
cheaper to market,

otig “SH T ' b DEV rdpive > andieat

\ilthis to prevent this deli of ptice; and inioaatindeseie of owas
and iprofit,'by reftraining ‘that! free: competition which would mit
centaihlyoceafion it, that/all corporations, and the-greater part of cor-
povation:laws;have been eftabliflied) In order to erect a corporation,
no: other ‘authorify in: antient times was:requifite. in. many parts of
Exrope;: but: that-of the townleorparate iniwhich: it was. eftablifhed.

Vor. I. ».& In

. Wa

THE NATURE AND CAUSES OF

BOO K In England, indeed, a charter from the king was likewiler neceffary..
1,
tw But this prerogative of the crown feems to have been referved

rather. for. extortisiz money fromthe fubjeét, than for the defe Ace
of the common liberty, against. fych oppreflive monopolies. Upon
paying a fine to the king, the charter feems generally to hav heen
readily. granted 5 and when any partigular clafg of artificers or traders
thought. proper. ta act, as..a corporation without a charter, fied
adulterine guilds,, as they were called, were not always diffi anchifec

upon, that account, .but obliged to, fing annually. to the king. for
permiffion. to ,exercife..their, usurped. privileges. ‘The immedia‘e

infpection of all corporations, and of; the bye-laws which they might
think proper. to enact..for. their, own, governmeni, belonged to ti:
town. corporat: i whieh they were eftablifhed ; and whatever, dif--
eipline was, exercifed over them, proceeded commonly, not from the:
king, but from that gveater incorporation. of whichthofe fubordinate:
ones were only parts or members..

Tue government of . towns corporate: was, altogether in the:

hands of traders and artificers ; and it was the manifett intereft, of.
every particular. clafs of them, to prevent, the. market. from being:

overftocked, .as they commonly exprefs it, with. their own particular.
{pecies of induftry: 3. which is in reality, to keep it always, under--
ftocked, Each clafs was eager to.eftablith regulations. proper for.
this purpofe, and,. provided it was allowed to do fo, was. willing to:

confent that every other clafs fhould do the fame... In pr inc

of fuch ‘regulations,, indeed, each clafs was obliged to bu bey the goods
they, had occafion for from every other within the tow
dearer than. they otherwife might.have done.. But: in Ecomperice, ;

they were enabled to fell their own juft as.much dearer 5 fo that.

far it was as bread as long, as they fay; and. in the dealings of She
different clafes within the town with one another, none of them

“were lofers by thefe regulations, But in their dealings with ths

4 country

somewhat: ,

Ss ons

moo A.

THE WEALTH OF NATIONS.

country \they, were all great gainers; and in thefe latter deal- CHAP.
ings confifts the ywhele trade which fupports and enriches Ga—y

every town,

5 Every townalraws its whole fubfiftence, and all-the materials of
its induftry, from the country. It pays for thefe chiefly in two
ways: fir, iby fending -back to the country ja part .of thofe
materials wrought up and manufactured ; in which cafe.their price
is augmented by the wages of the workmen, and the profits of their
matters or immediate émployers: | fecondly, by fending to .it a
part both of the rude and manufaétured praduct, either of other
countries, or of diftant parts of the fame country, imported into, the
town; .in which cafe too the original price of thofe goods : is
augmented iby the wages of the carriers or failors, and by the ‘pro-
fits of the merchants who employ them. In what is gained uponthe
firft.of thofe two branches of commerce, confifts the advantage
which the town makes by its manufactures; in what is gained
upon the-fecond, the advantage of its inland and foreign trade.
The wages ‘of the workmen, and the profits of their different em-.
ployers, taake'up-the whole of what is gained upon both. What-
ever regulations, therefore, tend to increafe thofe wages and
profits beyond what they otherwife would be, tend to enable the
town to -purchafe, with a fmaller quantity of its labour, the pro-
duce of a greater quantity of the labour of the country. They
give the traders and artificers in the town an advantage ever the
landlords, ‘farmers, and labourers in the country, and break down
that natural equality which would otherwife take place in the
commerce which is carried on between them. The whole annual
produce of the labour of the fociety is annually divided between

‘thofe two different fetts of people. By means of thofe regulations

a greater fhare of it is given to the inhabitants of the town than

would otherwife fall to them; and a lefs to thofe of the country.

X 2 THE

‘y 56

BOOK

Cates

THE 'NATURE AND! CAUSES ‘OF

Tue price whieh the:town: ‘really: pays for ithe ptovifions and
materials annually iniported into it, is the quantity of manufactures
and other goods annually exported from it. The dearer the. latter
are fold, the:cheaper the former are bought. The induftry of the
town becomes more, and that of the rita lefs riage dy

THat the induftiry which i is chcsied on. in towns is,: ‘every ‘where
in Europe; more advantageous than ‘that which is carried on in
the country; without entering into any. very nice computations,
we! may fatisfy.ourfelves by.one very fimpke and obvious obfervation.
In every country of Europe we find, at leaft,.a' hundred people who
have acquired!igreat fortunes'from fimall beginnings. by trade, and
manufactures, the induftry which ‘properly belongs, to, towns, . for
one.who has'done:fo by that: which:properly belongs te the country,
the raifing of ‘rude; produce by, the.improvement, and. cultivation of
land. Induftry,: therefore, mutt.,be better rewarded, . the, wages of
labour and the. profits of ftock muft evidently be greater in.the one
fituation than in the other, But {tock and; labour naturally, feek the
moft advantageous employment. They: naturally,: therefore, refort
as much as they can to. the town,’ and defert the country.

Tuz inhabitants of a town,, being collected into one place, can
eafily combine together. ‘The moft infignificant tvades carried,on in
towns have, accordingly, in fome place or other, been incorjorated ;
and even where they have never been incorporated, yet the corporation
fpirit, the jealoufy of ftrangers,. the, averfion to take apprentices,
or to communicate the fecret of their trade, generally. prevail in
them, and often teach them, by. voluntary aflociations and _agree-
ments, so prevent that free competition which they. cannot. pro-
hibit by bye-laws. The trades which employ but a fmall number
of hands, run moft eafily into fuch combinations. Half a dozen
wool-combers perhaps are neceflary to keep a thoufand fpinners

and

THE! WEALTH OF NATIONS,

157

‘aid weaversrat work:! By combining nut to take! apprentices they CHAP.
can not only éngrofs the employment; but reduce the whole manu- yay

facture into “a! fort’ of flavery to themfelves, and raife the price
of their labour much above what is dte lp beiet nature of their
work,” vee be best eet eetyejal arly Sev ded+ &

‘Tue inhabitants of ‘the country, difperfed in diftant - places,
cannot ‘eafily combine together. ‘They have not’ only never been
incorporated, ‘but ‘the ‘corporation’ ‘spirit never has’ ‘prevailed
among them.'°' No apprenticethip has ever beeh' thoiight neceflary
to qualify for thufbandry, the great ‘trade’ of the country.’ “After
what are called: the’ fine arts, and the liberal proteffions, however,
‘there’ is perhaps ‘fio’ trade which requires fo great a variety‘of know-
ledge ‘and! experienee! /'The inriumerable volumes which have been
written tipon ‘it‘in' all languages,’ ‘may facisfy/ us, that ‘among’ the
wifeft’ and’ moft ‘learned’ ‘nations, it has never been! regarded as a
matter’ very’ eafily underftood. “And from. all ‘thofé' volumes! we
fhall in vain’ attempt to collect that knowledge of its various and
‘complicated operations, which is ‘commonly:poffeffed even by the
common farmer ; how contemptuoufly foever the very contemptible
authors of fome of them may fometimes affect to fpeak of him.
There is fcarce any common mechanick trade, on the contrary, of
which all the operations may not be! as compleatly and: diltinéty
explained in a pamphlet of a very few pages, as it is. poffible ‘for
words illuftrated by figures to explain them. In the hiftory of the
arts, now publifhing by the French academy of {ciences, feveral
of them are actually explained in this manner. The direction of
operations, befides, which mutt be varied with every change of the
weather, as well as with many other accidents, requires much, more
judgement and difcretion, than that of thofe which are always, the
fame or very nearly the fame.

| Nor

‘THE NATURE AND CAUSES OF

BOOK ‘Nor only the art of the farmer, the general direétion of, the
Me: ale operations of hufbandry, but many inferior branches of f country

Jabour require much more kill and experience than the, greater
part of mechanick trades. The man who works upon brafs, and
iron, works with inftruments. and upon materials of which the
temper is always the fame, or very'nearly the fame. But, the man

‘who ploughs the ground with a team of horfes or oxen, works

with ‘inftruments of which the health, ftrength, and temper are
very different upon different occafions. The condition of the
‘materials which he works upon tao ‘is as variable as that of ‘the
inftruments which he works with, and both require to be managed
~with much judgement and difcretion, The common ploughman,
though generally regarded as the pattern of ftupidity andi ignorance,
is feldom defective in this judgement and difcretion, He is, defs
accuftomed, indeed, to focial intercourfe than the mechanick wha
lives in a town. His voice and language are more uncouth and
‘more difficult,to be underftoad by thofe who are not ufed to them.
His underftanding, however, being accuftomed to confider a greater
‘variety of objects, is generally much fuperior to that of the. other,
whofe whole attention from morning till night is commonly oc-
cupied in performing one or two very fimple operations. How
much the lower ranks of people in the country are really fuperior
to thofe of the town, is well known to every man whom either
bufinefs or.curiofity has led to converfe much with both. In.China
.and Indoftan accordingly both the rank and the wages of country
labourers are faid to be fuperior to thofe of the greater part of
artificers and manufacturers. They would probably be fo every
where, if corporation laws and the corporation fpirit did not pre
went it. :

‘Tue fuperiority which the induftry of the towns has every
‘where in Europe over that of the country, is.not altogether owing
to

THE WEALTH oF Nations

159

to corporations and ¢corpordtioN faws. It is fupported by niany C HAP,
other feguldtions; The high dutits upon fofeignh mdnufactures Us

and upon all goods imported by alién merchatits, aff tend to. the
fame purpole, Corpotation laws eridble the inhabitants of towris
to raife their prices, without fedting to be under-fold by: the free
competition of theit own countrymen. Thofe other regulations
fecure them equdlly dgainft that of foreigners. The enhancement
of price occafioned by both is every where finally paid: by the
landlords, farmers, and labotitérs of the coutitry, who have feldom
oppofed the eltablifiment of fach:moropolies. They have-com-
monly-neither inclination hot fitnefs to enter into combinations ; and
the clamour dnd fophiftry of metchants and manufacturers eafily
yerfuiade them that’ th: private intereft of a part,’ and ofa fub-
ordinate part of. the fociety, is the general intereft of the whole.

In. Great Britain the fuperiority of the ihduftry of the towns
over that of the country, feems to ‘have been greater ‘formerly
than in the prefent times. The wages of country labour ap-
proach nearer to thofe of manufacturing labour, and the profits
of ftock employed in agriculture to thofe of trading and manu-
facturing ftock, than they are faid to have dorie ‘in the Jaft century,

or in the beginning of the prefent.. This change may be regarded :

as the neceflary, though very late confequence of ‘the extraordinary

encouragement. given to the induftry of the towns. The: ftock .
accumulated in them comes in time to be fo great, that it can no.

longer be employed. with the antient profit in that fpecies of. in-
duftry. which is peculiar to them. That induftry has its limits

like every. other ;.and the increafe of. ftock, by increafing the com- -
he lowering: of profit -
in the town forces out ftock to the country, where, by creating a :
new demand for country: labour, .it neceffarily raifes its wages. It -

a ed

petition, neceflarily reduces the profit. ‘i

then fpreads itfelf, if I may fay fo,. over the face of the land, and by
being

199, THB oNATUYREA GAMD CADRES; OF

BOOK: being employed..in agriculture, is an <partiseftored, to the eouniny,

eens, atthe expence.of which,,;in, a.great.meafure, it had osiginally
been. accumulated..in, the town... That, every; where in, Europe the
greateft improvements of the countsy have. been owing to fuch
overflowings of. the ftock originally accumulated in the towns,
I hall endeavour.to fhow hereafter 5 and at the fame time, to de-
monitrate, .that though fome countries have by thia courfe attained.
to.a confiderable degree of ,opulences it, is in, itfelf, néceflarily. low,:
uncertain,,.liable. to, be diftyrbed and interrupted by. innumerable
accidents,, and in, every, refpect comtrary to the ogdex.of mature and.
of .reafon, The. interefts,; prejudices, , laws. and cuftams, which
haye given ,occafion,, to it, I, fhall_ endeavour, to. explain: ‘as fully
and diftinétly as I can, in, the third . and fourth, books of. this
enquiry.

Z32SGha. .

Qa. a
e &

\PEoree of the, fame, trade | feldom, meet together, even, for.

againtt the publicl,, or, in fome, contrivance to, ‘aife PrICESy Iti,
impoffible, indepd . ta. prevent fych, mestings,, hy,, any, claw which

juftice, But. though the |; law cannot, hinder people. of, the, fan,

trade, from fometimes. affembling. together, . it ought to, do nop.

thing to facilitate fuch fee aaa 3, iad lefs to a aeReeE them inen

ceffary, ; er pdeeomot s oe , ba mma ow oldisislo;
4}

“A REGULATION, which Bae all thofe of iid faine Sao dn,

gives every man of the trade a direction where to: find every
other man of it,

nigqoue

A REGULATION

ruscht cdabeibe | Vauaaeans 4

THE WEALTH OF NATIONS.

162

A n2GuLaTion which ‘enables thofe of the fame trade’ to tax CHAP.
themnfelves in: order ‘to ‘provitle for their ‘poor, their fick,’ their —y—

widows and orphans, "Up Pivicig thers coheaatonitantieh sieaanage,
renders fueh — meetin
gowos ab ov be ’ ,
An samigenitceiee only reese tc fiery: but makes the
att :of: the majority binding: upon the whole. In ‘a free trade an
effe€tual combination cannot be eftablifhed but by the unanimous
confent/ofévery fingle member of it, and'it cannot taft longer than
every “fingle member of it continues of ‘the fame mind. | The
majority of ‘a corporation can'enaét a bye-law with proper penal-
ties, which will ‘limit the competition’ more’ effectually and more
durably than any voluntary combination whatever.

Falmitid ul

Tux pretence that corporations are neceflary for the better
government of ‘the trade, is without any foundation. The real
and effectual: difeipline: which isexercifed over a workman, is
not that of his corporation, ‘but that of his cuftomers, ‘It is the
fear of lofing theif employment which’ ‘refrains his frauds and
corrects his ‘negligence: An ‘exclufive corporation neceffarily
weakens the force of this di(cipline. A particular fett.of work-
men muft then be employed, let’ them behave well or ill, It is
upon this account that in many large incorporated towns “no
tolerable workmen are to be found, even in fome of the moft necef=
fary trades. If you would have your work tolerably executed,
it muft be done in the fuburbs, where the workmen having no
exclufive privilege, have nothing but their character to depend
upon, and you’ muft then fmuggle it into the town as well as
you can,’ | ak :

Ir is in this manner that the policy of Europe, by reftraining
the competition in fome employments to a fmaller number than
- Vox. I. ¥ would

rh2:

THE \NATURB: AND | CAUSES 1OF .

sae tia would athervile: be: difpofed to enter into: then oeceffons: avery:
jena! important: inequality: in; the: whale: of the advantages: and: difadi.-

vantages of the: sssepccret gaeneyeeomns labour: eis odledss

SECONDLY, The policy. of Burpes by pe the: sai
tition in fome: employments. beyond; what. it, naturally would: be,.
aceafions. another) inequality of: am. eppofite kind in, the whole of.
the. advantages and er of the, different. dcp *
labour.and ftogk.. .....

In i teetn ote of! fi veckiisicenete sien naire
numberof, young: people: fhould:; be: educated: for certain profef>

fions,. that,.' fometimes; the: publick, and fometimes: the. picty of

private founders have eftablifhed, many: penfions, fcholarfhips, ex~.
hibitiens,, burfaries, .8c¢;: for.:this: purpose. which: drawemanycinore :
people into .thofe: trades, than: could otherwife pretend to follow:
them. In. all. chriftian, cowntries,. I: believe, the education: of the:
greater, part of churchmen is paid for, inthis manner. Vesy, few.
of, them are educated altogether at theix own, expence, The long,.
tedious, and ,expenfive education, therefore, of thofe who. are, .will i

not always procure. them. a fuitable: xeward,, the church being.

crowded: with. people: who, in, order to get-employment, are willi

to accept.of, a. much. fmaller recompense than what fych, an edae

cation: would otherwife have entitled. them. to.;. and:in this manner-
the competition of the poor takes. away the reward of the rich, .
It. would be indecent,. no doubt,,.to, compare either, ai curate;or
a. chaplain with a journeyman in any common: trade. The,pay
of a curate or chaplain, however, may very. properly be confidered
as of the fame nature with.the wages of a journeyman... They.
are, all three, paid for their work according to the contract which
they may happen to make with their refpective fuperiors, Till
after the. middle of th¢ fourteenth century, five merks, containing

4 about

E
]
q
K
f
4
‘
I
t
t
a
4
«
6
<
¢
6
-

wae eer ese erTa

oleae

THE WEALTH OF NATIONS.

about:asimiuch dilver as ten pounds'of our prefent money, wasin © H LAP,
England the -ufual:pay of avcurate or ftipendiary iparith pricit, as wy—w

we find. it fegulated: by ‘the decrees: of feveral different national

‘councils, At the fame period four-pence a day, containing the
‘fame ‘quantity of filver ‘as aimilling of our prefent money, was

Meclared to be'the pay-of ‘a ‘matter’ anafon, ‘and three-pence.a day,
equal to niné-pence'of' 6ur'prefent money, that of a journeyman
mafon: The wages of both thefé labourers, therefore, fuppofing

‘them to have been conftantly employed, were much fuperior to

thofe of the curate. The wages of the mafter mafon, fuppofing
chim ‘to’ have © been without employment one-third. of the year,
would have: fully equalled them, By the rath of Queen. Anne,

G. 12; it is declared, \* That whereas for -want of: fufficient main-

“¢ tenance and encourageme:\t ‘to curates, the cures:have ‘in ‘feveral
4¢. places.. been meanly: fupplied, the bifhop is, therefore, empow-
¢sered'to appoint by writing-under‘his hand and al a-fufficient
$¢\ certain Mipend or allowance; not exceeding fifty and-not lefs:than

“twenty pounds a year.” Forty pounds’ a year is reckoned at

préfent'very good pay for a curate, and notwithftanding ‘this aét
of parliament, there are many curacies under twenty pounds a
year. There are journeymen fhoe-makers in London who earn forty
pounds a year, “and there ‘is ‘carce an induftrious workman of dny
kind in that metropolis who does not earn more than twenty. ‘This
laft fum indeed does not exceed what is frequently earned by com-
mon labourers in many country parifhes. Whenever the law has
attempted to regulate the wages of workmen, it has always been.
rather to lower them than to raife them. But the law has upon
many occafions attempted to raife the wages of curates, and for
the dignity of the church, to oblige the re€tors of parifhes to
give them more than the wretched maintenance which they them-
felves might be willing to accept of. And in both cafes the law
feems to have been equally ineffeétual, and has never either been
Y2 able

THE) (NATURE) AND: CAUSES!/OF

B ama able io: raiftithe wages:;o6curates ior tor fink thole: of: dabouret®’ to.
t—y—~ the degree that was: intended ';::becaufe :it shas:never::been able:to.

_ shinder:either:the one from being: willing to accept of: lefs:than:the
legal: allowance, ‘on aceount of the indigence of their: fituation ‘and
the multitude: of: their, competitors 5s:or the) other . from receiving

More, on accountof the contrary comipetition of thofe who expected.
to derive either profit or pleafure from-employing. them.;

Tue great benefices and other: ecclefiaftical” dignities: fipport
the honour of the church, notwith{tanding the mean circum-.

ftances of fome of its inferior members. The’ refpeét: paid to the-

profeffion too-makes.fome compenfation-even to them for the mean-

nefS of their pecuniary recompence. In: England, and:in all Roman.

-Catholick countries, the lottery of the church is in reality much
more advantageous than is neceflary. The example of the churches

-of Scotland; of: Geneva, and-of feveral. other proteftant.churches,,
may fatisfy us that in fo creditable a profeffion, in which education:

is fo-eafily. procured; the hopes of much more moderate, benefices.
will draw a fufficient. number. of learned, decent and refpectable.
men into holy orders.

phyfick, if an. equal. proportion of people were educated at the
publick expence, the competition would foon be fo great, as to
fink very much their pecuniary reward. It might then: not be

worth any man’s.while to educate his fon to either: of thofe pro-.

feflions at his own expence. They: would. be entirely. abandoned
to fuch as had been educated by thofe publick charities, whofe
numbers and, neceffities would oblige them in. general to: content
themfelves with a very miferable recompence, to the entire degra-
dation af the now refpectable profeflions of law and phyfick,

THAT

In profeffions in which there are no-benefices, fuch as: law and:

IPHE! WEALTH OF NATIONS

»¢ "Tiseale’ariprofperous: race ‘of :men!:commonly dalled: men. ‘of sels P
letters; arecpretty much in the: fituation which: lawyets and:phyfi- w-~yp—w

cians: probably: would ‘be-in:upon ‘the foregoing fuppofition:!:;:In
every partof Europethe greater part of them have been educated
forthe:church, :but. have been hindered: by. different. reafons; from
entering into “holy orders.) They have: generally,: therefore, been
educated. at the:publick expence,. and their numbers are every where
fo great as commonly to. reduce the price of their. labour to a very
paultry recompence...,

Bgrore the.invention of the art of printing, the only employ~
ment. by which. a man of letters could make any thing by his
talents, was, that of a publick teacher, or by communicating to
other people the. curious and ufeful knowledge which he had
acquired: himfelf; And this is till. furely a. more honourable, a
more ufeful, and in general even a more profitable employmetit
than that other. of writing for a bookfeller, to which’ the art of
printing has given occafion. ‘The time and. ftudy,. the genius,
knowledge and application requifite to qualify an eminent teacher
of the fciences,. are at leaft. equal to what is neceffary for the greateft
practitioners in law. and phyfick. But the ufual reward of the emi-
nent teacher bears no proportion. to that of the lawyer or phyfi-

cian; becaufe the trade of the one is crowded with indigent people, .

who have. been brought. up to it at the publick expence ; whereas
thofe of the other two are incumbered wit!i very few who have not
been educated at their own. ‘The usual recompence, however,
of publick and private teachers, farll as it may appear, would
undoubtedly be lefs than it is, if the competition of thofe yet more
indigent men of letters wlio write for bread was not taken out of
the’ market. Before the invention of the art of printing, a fcholar
and a beggat feem to have been terms very’ nearly fynonymous.
The different governors of the univerfities before that time appear.
to-have often granted licences to. their {choiars-to beg.

7 In.

£66
BOOK

“FHE ‘NATURE’ AND’ CAWSES: ‘OF
In antientt times, before any charities of this kind-had been efta-

bevy blifhed for the edication iof indigent peopleto the Jearmed profel-

‘fions, ‘the rewards’ of eminent teachers appear to have:been much
‘more confiderable. ‘Ifocrates, in what is called his ‘difcourfe againft
rthe fophifts, reproaches the‘teachers'of his own times with :incon-
fiftency. * They make the: moft magnificent: promifes to their
@cholars, fays he, and undertake to teach them to be wife, to be
happy, and to-be juft, and in return for ‘fo. important a fervice
‘they ftipulate the paultry reward of four or five mine. They who
‘tcach wifdom, continues he,’ ought certainly to be wife themfelves ;
‘but if any ‘man was to féll {uch a’bargain’ for fuch’a ‘price, he would
‘be convicted of the moft evident folly.” He ‘certainly does not
‘nean hereto exaggerate the reward, and we may ‘be affured that
‘Gt°was not ‘lefs thanvhe‘reprefents it. Four mine were equal to
‘thirteen potinds fix ‘fhillings and eight:pence: five mine ‘to’ fixteeh
‘pounds thirteén fhillings and four pence. Something not lefs
than the! largelt of thofe two fums, therefore, muft at that time
thave been ufually paid to the moft eminent teachers at Athens.
Hocrates‘himfelf demanded ten minz, or thirty-three pounds fix
fhillings and eight pence, from>each {cholar. ‘When he taught at
Athens, he is faid to have had an hundred fcholars. I underftand
this to be the number whom he taught at one time, or who attended
swhat' we would call one courfe of lectures, a number which will
not appear extraordinary from {0 great a city to fo famous a teacher,
who taught too what was at that time the r:~it fafhionable of
all {ciences, rhetorick. He muft have made, therefore, by each
courfe of leGtures, a thoufand mine, or 3333/. 6s. 8d. A thou-
fand minz, accordingly, is faid by Plutarch in another place, to
have been his Dida¢tron or ufual price of teaching. Many other
eminent teachers in thofe times appear to have acquited great for-
tunes, Gorgias made.a prefent to the temple of Delphi of his ovn
ftatue in folid gold, We muft not, I prefume, fuppofc that it

was

YFHE’ WEALTH: OF NATIONS:

267,

wasvas-large: asthe life. His: .wey:of; living, as, well:.as; that! of CHAR.
Hippies and. Protagoras, two other, eminent teachers. of} thofe ae

times, is: reprefented by, Plato: as fplendid, even to. oftentation:
Plato himéelf is faid to have lived with a good deal. of magnificence.
AriKotle;: after. having: been tutor to Alexander and moft, munifi-
cently. rewarded, | as it 39; univerfally: agreed, both by: him and: his

father Philip, thought it:worth while, notwithftanding, to return:

to Athens, in order:to refume the teaching of his ichool.. Teachers.
of the ‘ciences were :probably.in thofe.times lefs common than they
came to:be in, an age or two afterwards, when the competition

had probably. fomewhat: reduced both ihe!price of their labour and.
the admiration: for their perfons.. The moft, eminent of them,.
however, appear always to have enjoyed.a degree: of confideration :
much fuperior. to any of the. like: profeffion: in: the ‘prefent times, .
The Athenians: fent Carneades the. academick, and. Diogenes the -
ftoick, upon a folemn embafly to Rome ; and though their city had.

then declined from its former grandeur, it was ftillan independent
and confiderable republick, Carneades too was a. Babylonian by
birth, and as there never was.a people more jealous of admitting

foreigners to publick offices than the Athenians, , their confideration .

for him muft have been very great.

Tu1s‘inequality is upon the whole, perhaps, rather advantageous :
than hurtful to the publick.. It. may foméWhat degrade the profef-
fion.of-a publick. teacher ;. but the cheapnefs of literary education js |
farely an advantage which greatly over-balances this trifling incon--
venieney. The publick too might derive ftill greater benefit from :
it, if the conftitution of thofe fchools and colleges, in which educa--
tion is carried on, was more reafonable than it is at prefent through .

the greater part of Europe.

Futrpty, The policy of Europe, by obftruéting the free cirews -
asin of ‘labour and ftock both from:employment to employment, .
and

168
7

THE, NATURE ,AND CAUSES; OF

BO,O.K and from place, to. place, oscafions. in fome, cafes, avery, Aneomyes
a. i nient inequality. in. the whole, of, the Advantages a and. direntoges

of their different wn igs Yo ctw srervothor <jeseher
oshey yh
Tar an of acrenasientlo obftrusts the ‘dah civunlation of
labour from.one employment to, another, even in the: fame place:
The exclufive privileges of corporations obftruc it rei one on,
to another, even in the fame employment.

Ir frequently; happens. that.while bigh*wages:are given tothe
workmen: in: one manufacture; -thofé.in another are obliged to
content themfelves with bare fubfifience. . The one isin an ad-
vancing ftate,, and. bas, therefore,’ .a; continual demand: for ‘new
hands;: , The other is,.in a,declining ftate, and the duper«abundance

of hands is,continually, increafing.,. Thofe two manufaétures may_

fometimes be in the fame town, and fometimes. in the fame neigh+
bourhood, ; without being, able to lend. the leaft-afliftance to:one
another. The ftatute ofiapprenticefhip’ may oppofe' it’-in ‘theone
cafe, and both that and an exclufive corporation in the other. In
many, different manufactures, however, the operations are fo much
alike, that the workmen could eafily change. trades with :one: an-
other, .if thofe.abfurd laws did.not hinder them.. The,arts: of
weaving, plain, linen and plain filk, for example, are.almof entirely
the fame. . That.of weaving plain: woollen is fomewhat: different ;
put the difference is fo infignificant that either a linen ‘ora filk
weaver might become a tolerable workman in a very few days.) If
any ef thofe three capital manufactures, therefore, were: decaying,
the workmen. might find a refource in one of the other two! which
was in a more proiperous condition ; 27d their wages would neither
rife too high in the thriving, nor fink too low in the decayirig manu-
facture. The linen manufacture indeed is, in England, \by a
mewivas ftatute, open to every body ; but as it is not much cul-
tivated

THE “WEALTH oF "NATTONS,

469

eivitGR Uhrougly thie greateh ‘part OF the ebiintry,’ ie Gan HAfUrd Hd dita.

general refource' to the workmen’ of othér decaying matiufattures,

- who, wherever the ftatute of apprenticefhip ‘takes: place; have rio
other choice but either to come upon the parifh, or to work as

conwndn labourers, for which, ‘by their habits; ‘they are miich worfe
qualified'than’ for any: fort of :manufafture' that bears’ any refem-
blance to their own. | They generally, therefore, chufe to come
upon the parifh. ' 9% ;

Waratever obftrutts the free circulation of labour from one
employnient to another, obftructs that of ftock likewife; the quair=
tity of ftock which ¢an be employed in any branch’ of bifinefs
depending very much upon that of labour which’can ‘be employed
in its\Corporation ‘laws, however, ‘give ‘lefs obitruétion ‘to 'thé
free circulation‘of {tock from one place to another ‘than ‘to that of
jabour, » It! is every where much’ eafier for ‘a wealthy ‘merchant’ to
obtain thesprivilege.of trading in a town corporate,” than siti ‘a
poor canal to obtain that of working init. -

THe obttrudtion which corporation laws give to the free cireu-
lation of labour is common, I believe, to every part of Europe.
That which is given to it by the poor laws, fo far as I know, is
peculiar to England. It comfifts im the difficulty which a poor man
finds in obtaining a fettlement, or even in being allowed to exercife
his induftry in any parifh but that to which he belongs, It is the
labour of artificers and manufacturers orily of which the free cir-
culation’ is obftructed by corporation laws. The difficulty of
obtaining fettlements obftruéts even that of common labour, It
may be worth while to give fome account of the rife, progres, and
prefent‘ftate of this diforder, the greateft perhaps of any in the
police of England,

Vou. I Z WHEN

_— Por

. .

179
BOOK
enna)

THE) NATURE’ AND CAUSES |OF

A) Wuenby: theo deftenction :of monafteries the poor: had \been
deprived of the: charity of thofe religious ‘houfes,: after! fome! other
ineffectual attempts fon their! relief, it was enacted by: thes 43d af
Elizabeth, c, 2 that: everyparifh fhould be ‘bound to provide for
its own poor; and! that overfeers sof the poor’ fhould|be annually
appointed, who, | with the churchwardens, fhould raife by a pith
rate, competent, fums, for this} \pu ‘pofe..

By this ftatute the sdoeadiie of providing for their own: poor:
was indifpenfibly impofed upon every. parifh. Who were’ to, be
confidered as. the poor of each parifh, therefore, became a queftion
of fome importance. This queftion, after fome variation, was at
laft determined by. the 13th and 14th of Charles. II..when: it:was
enacted, that. forty days undifturbed, refidence ‘thould ‘gain. any
perfon a. fettlement in. any parith ; but that within that; time it
fhould, be-lawful for two juftices: of the peace, upon. complaint
made by the church-wardens. or, overfeers of the poor, to:semove.

any new inhabitant to the parifh where he. was laft. legally fettled ;
uniefs he either sented a tenement of ten pounds a year, ‘or could:
give fuch fecurity for the difcharge of the parifh where he was then:
living, as thofe juftices fhould judge fufficient.

Some frauds, it is faid, were committed in confequence of this
ftatute ; parith officers fometimes bribing. their own poor to go.
clandeftinely ta another parifh, and hy keeping themfelves con-
cealed for forty days to gain a fettlement there, to the difcharge of
that to which they properly belonged. It was enacted,, therefore,
by the 1ft of James II. that the forty days undifturbed refidence of
any perfon neceflary to gain a fettlement, dhould be accounted only
from the time of his delivering notice in writing, of the. place of
his abode and the number of his family, to one of the. church=
wardens or overfeers of the parifh where he came to dwell.

Bur

a i, i ee

THE WEALTH: OF NATIONS,

Bu ‘pe pari officers, it! feems, were not always more honeft with
regard) to) their, own, than they had: been with regard to other
parithes, ‘and fometimes connived at fuch intrufions, receiving the
noti¢e,and taking no proper fteps in. confequence of it. As. every
perfon.in a\parith, therefore; was fuppofed to have an intereft to
prevent;as‘much as poffible their being burdened by fuch intruders,
it was further enacted by the gdiof William III, that; the forty
days refidence fhould be accounted only from the publication of
fuch notice in writing on Sunday in the church immediately after
divine fervice.: |

‘¢ Arter: all, fays Doétor Burn, this kind of fettlement, by,

*¢ continuing forty:idays after publication of notice in writing, is
«+ very {eldom-obtained ; and. the defign of the atts'is not fo much
‘* for) gaining: of fettlements, as: for the avoiding of them,: by
‘¢ perfons coming) into a parish clandeftinely: for the giving of
‘© notice is only putting aforce upon the parifh to remove. But
** if a perfon’s. fituation is fuch, that it is doubtful whether: he ‘is
‘¢ a¢tually removeable or not, ‘he fhall by giving of notice compel
‘* the parifh either to .allow him a :fettlement uncontefted, by fuf-

‘¢ fering him to continue forty days; or, by removing him, to try |

‘ the right.”

Turis ftatute, therefore, rendered it almoft impra€ticable for a
poor man to gain a new fettlement in the old way, by forty days
inhabitancy. But that it might not appear to preclude altogether

the:common people of one parifh from ever eftablifhing themfelves
with fecurity.in another, it appointed four other ways by which a
fettlement might be gained without any notice delivered or pub-_

lifhed. The firft was, by being taxed to parifh rates and paying
them; the fecond, by being eleéted into an annual parith office and
ferving in it a year; the third, by ferving an apprenticefhip in the

Z 2 parith ;

yr
CHAP.
eyed

172 THE ‘NATURE: ‘AND CAUSES ‘OF

as shee partthh; the fourth, by being hired. into fervice' there for a M yea tw
captions and seh in me {aoae Soriee during the —— of it, i the
| the

Noxopy can gaitr’a’ fettlement by either of the two firft ways, ens

but by the publick deed of the ‘whole patith, who’ aré ‘too! well th)

aware of the confequences to adopt any new comer who has nothing bel

but his labour to fupport him, either by taxing him'to parifh pine ow

or by electing him into a parifh office. mi

No married man can well gain any fettlement in either of the |

two laft ways. An apprentice is fcarce ever married, and it is wi

exprefly enacted, that no married fervant fhall gain any fettlement HON

by being hired for a year. The principal effect of introducing WwW
fettlement by fervice, has been to put out in a great meafure the fic

old fathion of hiring for a year, which before had been fo cuftémary by

in England, that even at this day, if ‘no particular term is agreed
upon, the law intends that every fervant is-hired for a year. But
matters are not always willing to. give their fervants a fettlement ‘by
hiring them in this manners aid ‘fervants are-not always’ willing to.
be fo hired, becaute as every latt fettlement difcharges all the fore-
going, they might thereby lofe their original fettlement in the.
places of their nativity, the habitation of their parents and. re-.
lations.

No independent workman, it: is evident, whether labourer or-
artificer, is likely to gain any new fettlement either by apprentice-.
fhip or by: fervice. When fuch a perfon, therefore, . carried his in-.
duftry, to, a new. parifh, he was liable to be removed,.. how. healthy
and induftrious. foever, at the caprice of any churchwarden or
overfeer, unlefs he either rented a tenement of ten pounds a year, .
a thing impoffible for one who has nothing but his labour to live
by; or could give fuch fecurity for. the difcharge of the parifh as
4 two

THE WBALTH: OF: NATIOMS;

173

two juftices:of ‘the peace thould: judge fuficient, What feowrity C HA P,
they thall require, indeed, is left altogether to their diferetions but wn

they cannot well require lefs than thirty pounds, it having been
enatted,, that; the: purchafe, even.of a, frechold, eftate of lefs than
thirty, pounds, value, thal net gain any perfon a fettlement, as not
being, fuffisient for the difeharge,of,the parifh, But this is a {e-
cusity which fcarce. any, man who,lives by labour can give; and
much greater fecurity is frequently demanded,

In order to reftore in fome free circulation of labour
which, thofe different ftatutes, h atirely taken away, the

invention of. certificates was fallen upon. By the 8th and gth of.

William HI. it was,enacted, that if any perfon fhould bring a certi-
ficate from, the parith where he was laft legally fettled, fubfcribed
hy. the; churchwardens and. overfeers of the poor, and allowed by
two Jnftices. of the peace, that every. other parifh thould be obliged
to receive him, that he fhould not be remoyable merely upon ac-

count: of his being likely to become chargeable, but only upon.
his becoming actually chargeable, and that then the parifh which.
granted, the certificate fhould be obliged to pay the expence both .
of his maintenance and of. his removal. And in order to give the
moft perfeét fecurity to the parifh where fuch certificated man.
fhould come to refide, it was further enaéted by the fame ftatute, .
that he fhould gain no-fettlement there by any means whatever, ,
except either by renting a tenement of ten pounds a year, or by,
ferying upon his own account in an annual parifh office for one.:
whole years and confequently neither by notice, nor. by- fervice, ,
nor by apprenticcfhip, nor by paying parith rates.. By the 12th:
of Queen Anne too, ftat. 1. c. 18. it was further enacted,: that -
neither the fervants nor apprentices of fuch certificated man fhould :
gain any fettlement.in the parifh where he .refided. under fuch cers -

tificate,

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THE, NATURE: AND) CAUSES |OF

Mow, far, this jinvention Aas, reftared, that free: circulation of '
\bbour which the, preceeding, .,ftatutes, had-almoft entirely,: taken
away, ,.we,may learn from) the; following, very, judicious: :obfer- :
vation. of, Doétor Burn. ::*f It. i¢ obviqus;)fays. he; ‘that: thete::ate
«« divers. good :reafons for requiring certificates with « perfotis: coms
“* ing to fettle in any‘ place; namely, that perfons refiding under
‘*: them can. gain) no fettlement, neither by apprenticefhip, Horr’ by
‘* fervice, nor, by, giving notice; mor. by paying parifh rates; ‘that
** they can. fettle neither, apprentices; nor; ifervants;; that, if they
‘* become, chargeable, ‘it | is certainly known swhithen;to.cemove
«¢ them, and. the arith: fhall-’be /paid for; the: removal, and for’
‘¢ their maintenance, in. the: mean times and that. if: they :falli ficks
‘* and cannot,-be jremoved, the: parifh which gavé' the: certificate
*¢ muft maintain them:,-None of all:which can ibe without aicer-
‘* tificate.. Which, reafons, will hold: proportionably for parifhes
<< not granting, certificates in ordinary! cafessi for it /is: fax)imore”
«¢ than an equal chance,| but that they: will have the certificated
“ perfons again, and in a worfe-condition .” The moraliof thie’
obfervation: feems to! -bé, ‘that certificates ought alWays'toz be ret
quired by: the parifh where any poor “man *eoiies'to refide;“and-
that they ought very feldom to be granted’ by‘that’which ‘he ‘pro
pofes to leave. ‘* There is fomewhat of hardfhip in ‘this ‘matter’
“* of. certificates,” fays the: fame ‘very ‘intelligent! author “in! ‘his
Hiftory of the poor laws, “by putting it inthe: power 'of'a parifh
<«- officer, to. ignprifona’ mari’as it’ were ‘for lifes! however incon’?
«* venient it may be for him to’ continue at ‘that ‘place where he’
«« has had the misfortune to acquire what is called a fettlement, or -
«whatever advantage he’ may Propofe to himfelf by’ ace Ase
ef where.”

TuHoucH a certificate carries along: with it no teftimonial:of
ia behaviour, and certifies nothing but that the perfon; belongs:

“WHEIWEALTH OF NATIONS:

375

to: the’ patith: to°which! he really does ‘belong, \it ‘is-altogethier dif- CHAP.
‘eretidnaity ‘in’ the’ ‘parifhPofficers' either: to ‘grant or to refufe it. A tees

mandamus‘was once moved for,’ fays: Doctor ‘Burn, ‘to compel ‘the
churchwardens and over{eers'to fign’a certificate; but the court'of
King’s:‘Benchy rejected. the motion asa) ners ftrange' mena
Tob ret deni brs -errobedet te

VT w® very ‘unequal ‘price’ of Vabour’ whidh we frequently find in:
England in: places at‘ no great ‘diftance from one another, is pro=
bably owing to the’ obftruétion which’ the law of fettlements gives
toa"ipoorman'who would’ carry’ his’ induftry' from‘ one parifh to
another without a certificate) * ‘A fingle man; indeed; ‘who is healthy
arid iiduttrious, ‘may fometimies refide by fufferance without one’
bitta mancwith'a wife ‘and! family who fhould attempt'to do fo,
would inanoft parithes be ifure of being *emoved, and if thefingle
man! ‘fhould afterwards; marry; he ‘would generally be removed
likewifei:'. The: fearcity of hands.in one pariflt, ‘therefore; cannot

always: ‘be, velieved:\by their fuper-abundanee.in another, as it is.

conftantly in Scotland, and, believes; in all other countries: where
thereisono difficulty, of; fettlement. ;.In fuch countries, though
wages may; fometimes -rife a little in, the: neighbourhood: of \a great
town, or wherever: ele there. is: an extraordinary demand.for la»
bour; andifink: gradually-as the diftance from fuch: places increafess
till they fall: back: to.the:common rate: of the country; yet :we never
meet; with, thofe; fuddenand unaccountable differences in. the, wages
of, neighbouring places. which we) fometimes find, in England, where
it is often more difficult; for a poor man to pafs, the. artificial .boun-
dary,-of a: parifh, than-an arm of the fea or a ridge of high:
mountains, natural boundaries, which fometimes feparate very,di-
ftinétly different rates of wages in. other countries..

To.remove aman who has committed no mifdemeanour from
“the; parith where. he. chufes to refide, is.an evident.violation of na-
| tural

176 THE NATURE AND CAUSES OF

B.,OX tial liberty and justie,, . The ‘common eople-of; Bugland, how.
igh ever, fo. jealous of their jlibesty,.but dike the commen: people of
moft other countries, never rightly, anderttanding, wherein, itocone
‘fifts, have now for oat shan century, sogehaer, Suffered thoan
‘felves to Tee to this pasaiiion avithaut a remedy; . Beth
men, of refle ion. too ig fometimes complained.of,, the Jaw sus:
fettlements 8, a, Publick... grievances , yetsdti has. wever berm ithe
objet, of any general, popylary clamours ; faghoasnithek iagaintt
general ‘warran tS a0; abulixe prado, pndoubtedly.,i:tvat sith
@ ong as waa not Bkely., te.coscafion, any general Oppaetioats:
There, vis fearce a,poor man in England ,of forty.yeats ofagel id
will, ‘venture to. fay,,, who, has... net ,an; dpmepart af; his lifdifelt
himflf, moft erally, oppreft by, this dil contrived damaf fetdles.
aments, ite to brtod ot vitq BOM? Yotne yinornerop yodt ,nocilio’
; edtoo ko rabttu ogew misriod’ & se wt ‘sont avig of! tor

1 OHALL: ‘gonclude:: ss loo shape with ‘Obfervingy er

ott ‘the’ whole, ‘kingdom sand penne by (pesticulie ordeas of

po a eh of mss Pry aicaa. camo vbr abel prac
ve now gone intirely, into, ailiile,; $6 pirate ae

<é dae four handred years, fays Dogtor Burn, sit-feems-“inie:to

+ Yay afide all endeavours to bring under " “& ‘regulations, .what

«< in its own .natdre fcems incapable of ute limitation: for:

¢ if ‘all perfons inthe fame‘kind of work were, to -receive \¢qual ,

¢: wages, ‘there would be no-emulation, and no room ‘left for in-

«¢ duftry or ingenuity.”

S342 823 75 5

ParTicvLaR atts of parliament, however, fill atnente ‘Prise
times to regulate wages in particular trades and in ‘particutar places. .
Thus the 8th of George ILI. prohibits under heavy, penalties all .
mafter taylors i in London, and five ‘miles round it, from ‘giving, ,
and their workmen from accepting, mote than two fulllings, —

THE IWEAL PH’ OF4 Wari oe!

between. rvaftets ‘aid thei! Workmen; ‘its counflllors are always ‘the
matters.) Wher the: vegufation, * théfefore) “fs in favour of ' the
poe iesocatwway jum ania Sguieanney “Bue is fontétimes othier-
wife when tn'ferOurOF the miatteny! Thee the Kw which’ obliges
the matters 3 feverhl different’ trades’ td pay tit workinen in mo-
ney and 1168: int’ Boddy)! ist “quite jolt did Ghuitables! a impofe ho
reab hatdthip Upeiy the Mafters." “te bil Obi és then: to} pay’ that
-valuetin qrnonepy Which: they pi etetiadd! to'paly, ‘Bur ai’ not always
réallyspay, ingoodsy! "Phis\'taw' is ‘ih | favo bf He remit
bueiehiei! Sth of Georpe TH! G9 th favobr’ of thé” matters. When:
matters wombind topether! in order to’ fedtice’ the wages oft ele
workmen, they commonly enter into a private bond or agreenient,
not to give more than a certain wage under ‘a certain penalty.
Worm thesworkmnen tbs: eitter IMs © Gilitrary edit bination! “of the
famniihind, motive neeepe df'd Certadty wage under d’'ceithin penalty.
the lnwh would ptiiith ther very feverety; digit aca imnparti sally
it-owop ldo treat! the: shifters iy WHE faite ‘thatiner.” “ple ste
Geongesttd;«ertforces! By ‘law What véty" Feplitheion whic ie ers.
fometimes: attempt to'efablifh by “uch” combinations, “the com-.,
plait of ‘the workmen, that ie’ piits ‘the ‘dbleft and moff indu-_
ftridus: wpon\the fae footing” with! an Srdinaty ne, feems:
pérfedtly well — diow. to fae

eit tol Ni Lo00 POUR WING biuow siadt .sysw

In antient times too it was ufual to attempt to regulate the:
profits of merchants and other dealers, by rating the price both of
provifioris arid other: goods.” The difize! of’ bread ” is, ‘fo far as I
citni nel ‘Oily ‘tetnnatit “OF thi andienit tifage.” Where there is.
an exclufive ‘corporation, it'miay ‘pethaps be proper’ to Tegutate’ the
price ‘of the? firft‘ neceffary of life.” Biit where” there is jndne,, the:
coriipetiaiOn Will"repuftte “hue better 4H “SHVUfize rhe”
Vor, IL. Aa. method:

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freien alfvaninpandy ence fe eaOr a uUerAPHiodt? COLA
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THE INAPURE AND) CAUSES :;OF

BOOK method of fixing the -affize of bread eftablithed by the 3ift of
——~ George II. .could not beiput in pradticeyin Scotland, on account

of a-defect in the law; its execution depending upon the office of
clerk of the market, which does not exift'thete. This defect was not
‘remedied till the igd, of ‘George, fII,;, The want, of an. affiz
‘eafioned (no fenfible inconveniency, ;and;the, eftablifament of
‘in the few:places where it; has yet.taken, place, has..produced no
fenfible advantage, In the greater part.of thetowns, of Scotland,
however, :theite,'is (an, incor poration; of; bakers; who, claim, oxchinlive
privilege, though they.axe not. very Mricly,guarded. 415 5 :hinyy;
4 Rod yy wcrndiod fovetnsettint t9adio. hag elves orld artip
Twe proportion, between; the, different. rates, both of, che and
profit: in> the, different, employments, | of., labons; and Stack Stack, {gems
Not ta, (be such, affected, as. has already, hes. obfaryed. by, the sighes
or poverty; the advancing, ftationary, ordgclining ftate,of she fociety.
Sitch revolutions in.the publick welfare, though, they, affect the genexal
‘rates both ofiwages and profit, ;must in the end .affcet them equally in
call different eroplaymients. The, proportion between them, therefore,
qhutt.remain the:fame, and canppt well be, altered, at Jeaft for any
eceueecaiaie hip ine sins ree Rat ecpart sor. ,vtdetsdal

neil Sanwomel to dqseon mtd ester’

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elated. rrony aime art ‘ -
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S teb)

Are

“THE WEALTH. OF NATIONS

tu tire old yd botfildsfio’ bsord io oxills ort oni Yo. beulioy
HaOVIB mO- ,baBliosd C1QoMb ck) Py MBGIOd tore dines ll sus

to sotto ot noqu Riibosgeh mouugexs. zit wal oct ni f

ou enw fdoleb ad T Ob the Beak Shards, wowtEn 9 sf

Py BT Sonifidétea's thd bre paid for the! uleioflandy:is CHAP:
PEA fad ater) he i cert hioly whe tenant cam ‘dfford to payin'tlie .
adtuat Uicuinftaneds Of the'linds” It adjufting’ the terms of tire
TAYE, Wie Handler ‘etdedvouiwito-leave him ‘tio greater:fhare of the
prdduide dhan what is! fufficient vo-keep ap ithe ftock-from which he.
furnithes the. feed)" 'payhthe labour): and purthates! and: amaine
tains the cattle and: other inftruments of hufbandry, together with
the pater? Mite’ oF faiiming Mtovk inthe ‘neighbourhood. ‘Fhis is
=e deft hare with Which the tenant dan content himitlf
WiMbad bath eigie “ater the Landlord Teldoin means to leavehim uny
TOL! AWA HHH OF tHe pinddued; lor, “what is the famerthing,
éhatovel parlor ith pices is Orel ad abuve this/ (hare; he naturally
Undaivoitrls' 26 tree Ve titi Rf aw the Sent) of his land, | which. is
evedenuy tie! Higher! dhe 'tenaje "dan. affowP!to payin) the
Wétudt’ Grebiiaaneay® of! ave tqana? Sometimes; ‘indesd, !1\the
liberality,. more frequenitly! nee: ighordtice; of \¢he landlord, .
makes him. aceept of fomewhat: lefs than this portion; and.
fometimes too;. though more rarely; the ignorance of the tenant
makes him undertake to pay:fomewhat more, or to content. himéfelf.
with fomewhat lefs than the ordinary profits of farming ftock in:
the neighbourhood. This portion, however, may ftill be confidered:
as.the natural rent of land, or the rent for which it is naturally,
meant that land fhould. for. the moft. part .be.lett..

Tue rent of land, it may be. thought, is frequently no more:
than a reafonable profit or. intereft for the ftock laid out:by the land-.
Jord upon its improvement... This, no doubt, may be: partly. the:
cafe. upon fome occafionss for itcan {carce.ever be.more than partly.

Aa.2- 4. the.

‘990 THE (NATURE: AND?) CAUSES \OF

BOOK the cafe.” The landlord demands a rent even for unimproved land, im
njeewd and the fuppofed intereft or profit upori the expence of improvement wi
is generally an addition to this original rent. Thofe improvements,
befides, ‘are not always made by the ftock’ of the landlord, but'fome- ?
times by that of ‘the tenant, When the leafe comes to-be renewed, br
. however, the landlord commonly demands’ the fame augmentation the
of rent, as if they had been alf made by his own. wi
aj, 4 fu:
He fometimes demands rent for what is altogether incapable of ne
human improvement.’ Kelp is a fpecies of fea-weed, which, when af
burnt, yields an alkaline falt, ufeful for making glafs) fomp, and i
for feveral other purpofes. It grows in feveral parts of Great
‘Britain, particularly i in Scotland, upon {uch rocky only as ie within i
the high water mack, which are. twice every aay ‘covered n We
fea, and of which the produce, therefore, ‘Was rieved “dilg ig
by human induftry. ‘The landiord, "however, white ci oq “!
“bounded by a kelp fhore af this kind, dein i wt Pr
as for his corn fields. ih i a ii a a

. Te, feain, the neighbourhood of the lands of Shetland is.more
than: commonly abundant in fith, which make a great part of the fab-
_Gitence of theis. inhabitants. , But in order to profit by the,produce of
the water, they mut havea lasbitation upon the lupFig hd hewe land.
The rent of the landlord js in proportion, not to what the farmer

_canmnake by the land, but to what he can make both by the land
aml.the water. . It. is.partly paid in fea fiths and one of the very
few inftances in whichrent:makes a:part of the price of that com-
Oe | is to be found in that ih

Tae rent of land, therefore, confidered as the price pid for
the ufe of the land, is riaturally-a ‘monopoly price.: It is not at all

' sproportioned to what the landlord may ‘have laid out pot» the
; improvement

THE WEALTH OF NATIONS.

improvement of the land, or to what he:can afford harecenen to

ee ee pve tie Giitart But
‘Svqu parts only, of, the produce of, land, an ‘ommonly, be

brought to market of which the. ordinary price is fufficient to replace

the ftock which. muft be employed in bringing them thither, together

with its ordinary profits. If the ordinary price is more than this, the
furplus part of it will naturally go to the rent of the land. Ifit is
not more, though the commodity may be. brought to market, it can
afford. “Mo rent to the Jandlord. mn the Re is, or is ne
more, depends upon the demand,

Tunas are fome parts of the aerate of, land for which the
d must always be fuch as to afford a greater price than ‘whet
is fufficient to bring them. to market's and. there | are others Aa
ai it either may ‘or, may not be fich as to afford this
price. ‘The former mutt always afford a rent to the land.
The latter fometimes may, and fometimes m mye not, “according to
different circumftances.

Rewt, it is to be ‘abferved, therefore, “enters into the ‘compo-
fition of the price of commodities in a diditrent ray’ fiom’ wages
and profit. “High or low wages ‘atid profit, “are the canfes OF high
Sr low iprice »' Bight or tow Yent'is the OAedt UF it! dts bedtufe high
or tow ‘wages and profit muft te pai, ix order to bring a‘ particular
commodity 40 naarket, that’ its price is high or lows Bist it'is be-
caufe ite price is ‘high orlow } agreat deal more; or very little more,
or no more, than what is faffitiedit to ‘fay ‘thofe wages and
profit, that it affords a ‘high’ ‘rent, or a low’ retit,”’ of ‘norent
at all.

“Wap particwer, seins, fuk, pf sole pasts of the pinduce
of land which always afford fone rent; fecondly, of thofe,which

fometimes

984
a

THE NATURE AND CAUSES ‘Or
fometimes thay and" fOmetimes may not aHUtl reht) atid,’ thitdly,
of the variations which; in the’ different periods ‘of improventedit:
naturally take place,’ in' ‘the relitive’valli¢ of thoi two different fits

of ‘fede produce,’ whert compared ‘Hoth’ with one’ tifiothet,’ aha with
mahifadtited® Cominedicied, Wilt Wide this chipter “tied ene

parts: euoid sig vor! en mud ,olttes to wtdawa solid & 2fib3
nod ba Hihuspst e9eo99d IWOCK ekol .ea8qatog ern s

evaw tod enw biolbashed Tl oopborq odd Pri re)

louie WOUSt of) TO Mol iP. AB Rit e bis ,2ubowd sili le alssic
Of the Produce of Land which ahways ‘affords Rent., ae
$ men, like all other animals, naturally: multiplycin proportion:
ii toi the meansiof their fibfiftencey foedtis alevays): mover, iefs,.
in'demardi:It:can always purghafe or command agreated orchingjier
quantity {of labour,!:anst| Somebody can): always; becfoond nwhio iig-
willingoto: dovfentething in \ordef:tosabtain ith: » Fhe quantitpcof
labour, indeed, which:it can purchafe;:{is not-alvrays;equal toi what
it could. maintain if: managedi\in:the, molt tecamomital manner,
oraecount of the high: wagesdwhich, are fomoetinesrgintn,taldabburts,
Butcit: can: always:pischafd fiche: quantity: of: daboun:-as sit: can:
maintain, atcording to the-rateiat: which that! fort‘ofitabour ipcoms.
monly maintgined in the neighbourhood. rads wrlgid yllersneg 2
-3d Sarat Siotoidild* eatquat bork atenib eit Yo noir oqorty ables:

Bor land, in almoft any: fituation; produce w featerqoantity

of food than what is fufficient: to maintain all the labour necelfary:
for bringing it; to. market, in. the, moft: liberal way in, which that:
labour is tver:maintained.. ‘The {urplus: too is. always. more than.

fufficient|to replace the, frocks which, employed that, labous,, together

with ats profits... Son: aa i sini Hf ont
baie ie i cloulw ,otor

2UO9RBRINBYDS SLE youd 199x4 Jlorri

Mihai soft delat moors i Norway andScotland ‘produce, fome.
Pe ay cattle af which the milk and nts 6 are

4. always.

POH By MRSLA MH, OF NAF! ONS

neceflaty,for, tending them,.and:.ta, pay, the; ordinary, profit to, the
farmer, .oryowner, of, the herd or flogk,s. but, to,afford. fome, fall
rent te the landlord. The rent increafes in proportion to the good,
nefp,of the pakture. , The fame extent of grqund. not, only, mains
tains a greater number of cattle, but as they are brought within
a {maller compafs,’ lefs labour becomes requifite to tend them, and
to collect their produce. The landlord gains both ways; by the in-
creafe of the produce, and by the diminution of the labour which

mutt be maintained out of Fe Qe cous

oT waqcrent: of land varies: with its: fertility, whatever be its i
duct,;.and with itedisuation, whatever'be its fertility.‘ Land in the
nsighbourhoad: of: a town, gives iaigreater rent than land: equally
fertilein !a:diftant pavtdf the country: Though it may. coft ao:more
labour toigultivate the one than the other, it muft always coft more
toring the» produce!of thediftang land ito2market.).A greater
quantity: 06: labour, thérefore;| :muft:bs maintainedout: of it; and
thedusplas from owhich are: drawn both: the :profit of: the: farmer
and the zent.ofi dheclandiordy nsuftobe diminifhedy »vBat:in remote
pactsof the country the:rate of profit; iasihas: already: been fhown,
is generally higher than in.the neighbourhood of a:large towns icA
fmaller proportion of this diminifhed furplus, therefore, muft be-

Jongito the landiords2u bog .OURL nk yea flomis ca .basl roa
yuleoaa idedsl ons Le cists, ot Sigiorivt esiedw «edt beat to
Good toads, ‘cahals, and Wavigable’ rivers; ‘by’ dimiaifiting the
expehce® of carilage, put’ the ‘remote parts of the’ country ‘more
riearhupoit a level’ with thofe in the neighbourhood/of ‘thé! town!
‘They'are upon’ that account the greatettof all improvemerits, "They
encourage the cultivation of the remote, which mutt always 'bé the
moft-extenfive circle of the country. They are advantageous. to
the tows; by ‘breaking down ‘the’ monopoly’ of 'the'country ih |its
e seeiony ait Phe ae ett wide ee neighbourhood.’

383
CHAR

ain Ae

com]

Ati

twen

ondis

dred.

foun:

little

wher

into the, remoter counties...‘ Thole. neteoter counties, they jpits whi

tended, Meyer Of. lations, - would ‘be ‘able’ to Gelb their: Eur

and, corm, cheapes. in-the! London maskée than themidives, couk

1 would wore reduce their- sents and ruin: eheit' culeivation:. tend

Keates, Downer. deme.pifen,-stnd thee culsivation has bem: brea
a eomeusl Mer “erat sd 10 sory ott. bene and

sbeod kk

. &
cS

A corn field of moderate fertility produces a much greater

peop? Hert sat tec: Beemer pon deathor oni +f
B's, the, tative, valags of thofe sw dillereat, Sprcina ob font,
bread and butcher's-ment, ase-vety diffrent in the different periods
of agriculterc. In its rude ‘beginnings,ghe unimproved wilds,
which then. cgcupy the far gteater-part of the country, ass all
atendunet to Wateiy There is more butcher’s-meat. than bread,
7 and

THE WEALTH OF NATIONS.

end brend;; thesefore;'te the food ‘for which there is the greiteft ©
competition,..and ‘which confequently brings the greateit price.
At: Bubnos Ayres; we-are tok: by Ulloa, ‘four reals, one ‘and
twenty gience halfpenmy {terling, was, forty or fifty years ago, the
ordinary price of anon, -cholen from a’ herd of\two or three hun-
dreds): b50 fays nothing of the: price of bread, ' probably becauie he
foynd mothing' remarkable about it. An ox there, he fays, colts
litgke;moré than ithe labour! of catching hiny.' But corn ‘can no
where be. sailed without: great: deal of labour, and in: 4 country
Whigh (ies; upom the» river: Plate; ae ‘that: time the direct road from
Europe to; the: filver.: mines.of Potofi, the money price of labour
coulé.netibe:vety cheap.: ‘It'is-otherwife when’ cultivation is ex-
tendedvever: the greater part of ithe country) ‘Theté is then more
bread then utcher's-meat. The competition changes its direction,
and. the price of butcher’s-meat becomes’ greater ‘that’ the "price
of bread.

an Ty rigwany & ow

eb dile tated Bethe of -eileivaton the’ anitap d wilds,
beceane tifiifficient 46’ fupply ‘the demand for butcher’s-meat, A
great par8 OF the ¢titivated lands mnuft’ be‘éemployed in daring and
fatttfing'tattle, of which the price, therefore, mutt bé fufficient to
Pqociofily ‘the labour’ neceffaty for tending’ them, but the rent

ie Repos et ‘aft’ the profit ‘whiclt’ the ‘fatmér*cbluld “have
drwvet from fach ‘tand ‘employed in tillage, “The cattle bred upon
the*Mioftiéultivated ‘moors, when brought to the fame market,
are, in proportion to their weight ‘or goodnefs, ‘fold“at the fame
price as thofe which are reared upon the moft improved land. The .
proprietors’ of:thok ‘moors profit by ‘it, and raife the rent of their
lancimproyortion to the price of their’eattle. - It is‘not ‘more than
a ¢entuty-ago; that in many. parts of the highlands ‘of Scotland,’
butches’s-mmeat::was:as’cheapor cheaper than even bread made“of
oatmealocdT heamion qpened the market-of England to thehigh~
iaMou. I. Bb ? ~ Jand

THE NATORES AND \G@AUSES! (OF

laid’ cattle,’ "Their brdinary price: dao ae ptefene: about theet tines
—— greater thart at the beginning of thé ceti€ary, atid the rentsiof matty
highlarid eftates have beéti tripled and: quadrapled iii the fattte tinte,
In almoft very part of Great Britaima: pound: ofthe bed butcher's-
mitat is) in the prefent: tites|ogenorslly (worth caore. that: two
pounds of the: beft white: breadyy: 7 Fa en reese.
tinnes wwantiy tinet or four: ca heat rion ol bree diate Bale tor!
Hot hy ebrrst 4 F atidedn
vii i thus: that snithe prowrell af ditiprveiieht the bla pe
of unimproved: pafture> come to ibe! regulated «itr fortieo meafutte’ by
the ‘rent: afid' ‘profit ‘of whae is improved; and thefe again by the
rent and'profit of corm: | Com is anantival crop. Batcher'stmeat;
a crop whicliréquires four or five lyears''to prowi As an! dere? of
land;: therdfore, will produce:4 much firalter! quantity’ of theione
fpéciés afi food than of the orher; the inferiority of the quahtity melt
be compenfater by the fuperiority of the price. ' (If it was more than
compénfated, tore corn land ‘would ‘be turned into paftare}y afid
if iti was noc contpen fated) part “of what: was’ ‘in -pattine wouhd!be
bod greedy teieenetitls 10 boedwodrdgien oft my. yet, doulw yleri
ott sxeiw dloidw mios to anonudedlib od? yd begeiveatib dose yay
Pee equality, however, between the rent ‘arid profit? of graf'and
thofe of: corh ; of the land ‘of which’ the ¢mmediate' pride is ‘food
for:eattle;\ianid of-that of whith the imrhediate produce isfodd for
mens wault:be undérftood to take place Only throogh thie greater
part Jof! the:improved Jandyof ‘a great country) Infome’ spare
ticular: docal fituations it is‘quite*otherwife, and’ the rentend Profit
of: wee are hone — to! igen ‘be: nave y roseet ie ‘
Tuvs in the: repent of a great town, the Waiond for
milk and for forage to horfes, frequently contribute, along with the
high price’ Of ‘butcher’s-imeéat, to ‘raife the ‘Value "ot gtals’ above
what’ iriay be called ‘its ‘Hatural proportion to that’ oF corn: ‘This
7 local

TS BIWBAL BMA OF 9 HAA ORGS:

logalindvaritage,dit iia cannot: be seminaries Lulsiteta
— on brs: .ysiae0 Slt to Eeinnigod ond ip umctt tolpoTg
by garpy ond Gi bal jibsup bra bsign rei bait
pn inn me es shape: Soiasaicies wb: fome.
counttics {opopulaus that the wholetenitory, likethe lands in the
netghbouthond: of aigreat;tawn,: has'not been: fufficient: to. produce
both the grafs and the corn neceflary.for the fubfitence..of their
inhabitants, Their lands, therefore, have been principally em-
plopediia:the produttiom of grafs,\ the more bulky commodity, :and
which tannot:be fo sably:-braught from ai great: diftance;,and corn,
the food: of the great body, of the people, :has been chitfy. imported
from foreign: countries; |: Holland is at prefentin this fituation; and
* aoconfiderable past of anticntiItaly feems to haven been: fo:during
the praspecity ofthe: Romans.‘ feed: well o}d, Cato ifaid) i as: we
dented: by, Gicero. wpe the firt:and mow: profitable; thing in the
management,of, aiprivate.eftates to.feed.tolerably wall; the fecond 3
and to, feed. ill, the third., To plough, he ranked, only in-the fourth
plase.of.prohtiand advantage: ‘Tillage, indeed) in that part of antient
Jtaly which Jay in the neighbourhood of Reme,: muftsdiave, been
very much difcouraged by the diftributions of corn which were fre-
quansly, madeita te. people, ; ether, gratuitouAy, or.iat a very low
Drisen: oTHs conn ames. brought from ithe conquered, provinces, of
which fexeral, iuvhead af. taxes, (were obliged toi fusmith>a:.tenth
part. of their, produceat a. fated price, mbous fixpence'a: peck, to
thecepyblick: ‘Thedaw price at which this com, was: distributed
ta.the people, mult, meceMarily: have i funk the price of what could
he brought,to ste, Reman imarket fron. Lativms.or the -antient
territory of Rome, and muft have difcouraged its abot. in

that SPHBI

da an op0 country too, of which he principal produce j is.corn,
a well englofed piece of grafs wil Heaney rent higher than any

corn

ye THE INATURY AND! ‘CAUSES! OF

BO K ddth field ihicits Weighbotrheed. btthis/donvenieriti:fory the mainte-
Ce HAnKe OP the Watele employed dtvcele cultivation bf theseorhy:and
‘ite high ene) th ¢hisieafe;>nowfo properly paid fromy thé value:of
its’ own ‘proditces© a9! fiom? that: of the cortinlands which are ieulti-
vated’ by means of it. - It is likely to fall, if ever the neighbouring
fahds' ‘are eompleathyenctofed; s The prefent high rentiofenelofed
fall if’Sébtland feetns iowing-tb the {Garcity ‘of :ériclofiire): and will
probably laf? 16 longer thamahatdatcity: 6 The advantagesofen-
cloftird is gredter! for patture.thanMbricomi!s It:faves-the labont wf
‘guarding the Caetle,: which feed benter tooo whei-they are noteliable
"eS be diteerwed opeihtrieeperoon! hie igs oo od rloidiw Josd Ya
DAB Niginw sist ont tot egailiidt aovelvirtay Susa bed orf tesy ig9b
CS Bier where thereois no! local, advantage of; this, ‘kindy the jvent
bi cco Gorn; 512 whatever! eife is! the: ¢ommon vegetable ified
‘OP 'tHe Pedpley mutt ardeurdlly: regulate: mpom! the!lerid-whidasis
fit for producing it, the rent and profit: of vpattuné slo} ich botl it

cE IAEENOE ‘the! artificial graffds, -ofityrnips,iscarrotss; caltbages;
“ahd tHe Uther expedionts which'have beer fallkniwpon eomakiven

in natural grafs, thowld fothewhat: reduce, ‘it:inight be expected;
the fuperiority which, in an improved country, the: price of
“Butehers neat naturally ‘has rover:that? oft:breads:!1¢ Seng ac+

“that, at lea inthe London market, ‘the phics-of butcher's. imeat
“in’'ptoportidn to the: priée of bread» is: as good dealildwer ‘invthe

Paitis iat Mov The ste ese is > ATnomM /sit or hie} road yite hy
ih OP 3D Hig

has given us an account of the prices of butcher’s meat as!:cdrh-

; mony paid by that prince.. It is there faid, that the four quarters
3 of

jual’ Ganitity tof lend feed a greater nuinber of: dattle'than ‘when.

“cbr to: have’ done’ fo y>arid ‘thelte is fame; reafoh far beksiigg
“prefent “times | thai it Was’ ‘it Pe ly ty lof the voneasea

‘In the’ Athlete to: te ‘Dife of prints titre: Doétor Bitch:

THEO WEA LIA OF TA TIGNSG: wep

¢i. am ox weighing: frrohundred pounds. ofually cof him mine § Bg R.
(pauadsozens thitlings?:orthereabouts ji that tas thirty.ome;fhilings Wy
‘and leight? pence iper hundred cpounds weight. Prince Henry died
-Ohithe: 6tly of Noweinber; 1614, in thermineteenth. year: of re
yntimoddgion ont 19v9 47 Ist of vlodt ei af oti to bens’ vd
bihdieroMarcint 176%, there sw’ a piathamentarys enquiry: sy; the
\eaufes:of theo high iprice: of iproviftons. atthat:¢ime,:|+dt-was then;
-amdngother/iproofito theofamespunpofe, given in; eyidenge by, .a
— Smherohaht) thatcini March,» 27163; be} hadhoyiCtualled) his
Rijs! foro twenty -fodrorctwenty: five? fhillings the: hundred, ;meight

of beef, which he confidered asith@ordinaty prices! wheregsy, inithat

dear year he had paid twenty-feven fhillings for the fame weight and
ifort oT Ris high? pricesinit764,/ is, however; » four, fhillings and
eightLqsdnge cheaper thanithe ofdinary price paid by, prings, Henry s
cankhitvis the! beft beefjionty;:litemuft! be ebferveds: which, is fit,to,be

ag i Sage ni Sis trot ont al anorbord 10% th

sarees pticepaid'by pritice Hénry: amounts: taig ifds\per ;ppund
Aweithe’ of the whold:careafe, coatfel and: choice pieces -taken ; toge-
righer. ;'andat that raté:the: choice piecesscopld: Aot, have. ‘been, fold
‘by retail for kefsthan ¢yavor gd. the pound, 2).). |,
O59 BP a OS OBaverretent eon? dei Ai yrlye

of hethe parliamentary: enquiry.\in. sxytequy the mritansion Siased, the
pries-of the choice pieces of the belt: beef: to-bestathe confumer.4d.
and Yapali’ the pound::and the coarfespieces in general,\to,be from
‘féven farthings! to-2 ds and .a:3d..; :and: this they; faid ;was,.in
«general one, half-penny dearer. than the . fame. fort..of . pieces .had
ufually been fold in the month of March.. But. even. this.,high
price is ftill a good deal cheaper than what we can well fup-
“pote, sthe easion rere iprice:to shave, yong neta ee of prince:
Niveau ener tw eettoragte sedooe AR

y fe 3 rity Qrr & day by 4
Psp Mot sit tere sachet ekg

%
9
|
we

Fy ew

gine

6 @awnm +

Bota abA grt bias hip

Dvrinoe

190

THE NAT MRE OANR 1GAUSES OF

BOGH ..Dupia;the awvelys Arlt years, of sha da, contre the aysrage
warns pricesof, the beftowmbcat, at the, Windlor market wagt/., 18 4--gds
“ bs asd of ning: WancheBer. bushels... off stn omeesnrnte) iotioh

greater than in a corn or grafs field, But to bring the ground into

big dot basrqod ods in fissl os oot qo oiT roms
‘Bum i in the, twelve, years preceeding 764,,ancluding. that year,
the average price.of — ithe beft BRA ARARG AEH
saildiitlit ade ha iGiafles a psy to csurtefinned rob dherey
tour troy “uorislt tshivemn! ot viliais
ari the poring Sith years, of, the, lait pithy therefore, wheat
ananen to have been: agoed.deal cheapera ARG; busshers ARERR A
good deal dearer,.than im, poe — ee 479 49:iR
cluding. that. yeates: coi pigdrh .eramotten mn yadt! od vile UI
HOW. VLPowd flores
In all great countries the greater wart Of ‘the cultivated: lands
ase employed iin predvaing: eishex food | far men of. food, for.cattle.
The rent,.and profit of thefe .regulate the, xent,.and prot of,, ail
other , cultivated. land. ,. If, any particular produce.,afforded _ lefs,
the land would foon, he susned, into corn or, pafture » and, if any
afforded, ports, fome; past iof the lands. in: conn; oF paftare awould
oe bastinee men eat poldiuns tert tom ossrit - iviot heide
wit ow? troads: vibsard nadin'stc
1 Tuose) pose Pi “indeed, which ; require cither cy ane
original expences of: improvement, ora greates annval expense of
cultivation, sin arden to: fit the land, for, them, appear sspmroonly
to afford, the ane a greater rent, ‘the other ia\gseaten profit than
corer patture,, This daperioritys, however, will feldom,be fonod
to amount to more than crenmaiandel airing sib
pe nar eh tid) ab + esuagn x yeti Tar wt

yale OR bits anton ta Fl orth i

colle dshetpigenteieptcetahiv gehts; edemniogaai oth ehe

rent of the landlord, and the profit of the farmer, are generally

this

. = =, wet eee A. hlUe:lUetdl MO lCU.lCU oe oe. Ct

He WoL EH oF: NATIONS.

FOr

éhis Wndibion fegatned tndtt Vecperie’. “ Bfehice a grate-seit ‘be. CHAP.
cdmnés Jud fo che lahdtotd. fe teduitts foo'e: nore ‘atten everand Woy

ikilful management. - Hence!" greater” 'proht’ becomes tie to) the
farmer. The crop foo, at leaft in the hop and fruit garden, is
moré jabato? Fis plik, 2 eheretore,: 'befides” Conipenfating all
octationial! 16ftes,” Hite" hemi ke the profit ‘of inf
rahce. The circuriftances of gardeners, getierally meant, ‘and always.
moderate, may fatisfy us that their great ing is not comfnonly
deftecdmpented.: thelr ddightful® art’ by age by fo many
fich' people! For aivitentetit? flee ak atage tor be atiade:
BY thole\ whe pracielie for prot; bedauke the! perfoAs- whe! Mould,
naturally be their beft cuftomers, fupply themifelves with: all’ their:
moft precious productions,

‘hnat beisvisius edt to tisq totsorg ot 20h iB le wl

“lp ipn Advantage Whicl the Mndlord daiives! asset vee
ments {eens at no: tine to Have’ been greater’ than ‘What Was Tut
ficient to‘compenfate: the “originial’ expence of making ‘them. "In
tid’ dhtieht hufbattll'y) after the Vineyard, & well! watered Ritchen.
Pati Mehl! £6 Hive Been eite part "of ‘dhe farit! whiter was fupe
pofed to yield the moft valuable produte:'; But’ Democritus, who:
wrote upon hufbandry about two thoufand years: ago, and’ who
Was tegdrddd by the ancients’ as one of the fathers’ of: the Urt,
thought Hey Genet! wt wifely. who» enclofd'a ckitehen garden
Phe! profit; Ne ‘fhid," Woule hot compenfate the expenceafiia fone
Wall j Std Bricks" (he!“rieaiity "I fappot) bricks baked’ in’ thé fun)
Bauder” With ‘Ehie che,’ aiha “thie: winter’ lormp “adhe required.
eOhtinial repairs. Coltitiellay who teporte this judgement of

Democritus, does not controvert it, but propofts''a wery fraghl-

méthod of enclofing with a hedge of thorns and briars,. which,.
hie fays; he had:-found by experience to ibe both!,a:Ja@ing sand an:
impenetrable fence; but which) it feems, was not comimonly:known
ih’ the’ time’ of: Democritis. . i et the; opinion: of.
mai? ~ Columella,

392

THE MATURE. » ANOS s AUSES ag

B 00 K Columele, aii had. before been Sa {
oe the judgement’ of ‘thole “antient” improvers; the. Wane OF -

as in the ‘prefent, to have the ‘comin : of:

Kitchen garden had, it essai he ih un al ul rg

venty Abd + ne

pay “the extraordinary dilture and ‘the ‘andl ‘of waterin
in countries fo near the fun, ‘it was thought proper ee thot
at cant oF N ae
which ‘could be ‘conduéted ‘to “every | "bed in “the 2 ey tig

the greater ‘part of ‘Burdpé, a kitchen pas is ‘Rot, ‘at
fuppofed to ‘delerve a a better enclofure than, ‘that ‘rece recon sail
Columella. Th Great ‘Britain, ¥ and. fome, other n¢ et un
the finer fruits cannot fe ‘brought to 5 perfection |

tance of a wall.”’Their ‘pice, therefore, i in hk ps
‘be fufficient ‘to pay the expence of ‘Building and ‘maintai
they ¢atiniot’be hiad without: © The fruit-wall fhequienitly ah
the Kitchen garden,’ Which ‘thbs enjoys: the ‘Benefit of lal it pice
which its own produce could feldom pay’ ‘for. wedi sco

eres" é mult

Eyrecod ry oni weveyt}

Tnar ‘the vineyard, when properly plantes atid brought ts

perfection,» was the moft valuable:part of the‘farm, ‘feeiis’to have:
been an undoubted maxim in the antient agriculture, ‘as tis itt”
the modern through : rall the: wirie countries. But whether it was’
advantageous to planta new vineyard, was a inatter’ of difpate’
among the antient Italian hufbandmen, as we learn from’ Colti-
mela. He decides, like a true fover of all curious" cultivation;
in favour of the vineyard, and endeavours to fhow, ‘by ‘@ ‘com
parifon of the profit and expence, that it was 4 moft advantageous
improvement, Such comparifons, however, between the’ profit
and expeni¢e of new projects, are commonly very fallacious’ ‘and
in‘ nothing more fo than in agriculture. Had the gain actually
made by fuch. plantations. been commonly as great as he imaagin

it might “have been, there could have been no difpute about it.’

The fame point is frequently.at this day a matter of controverfy:~

4 ) in

goes Sen Ce a a AR ee a ee ee oe CS | fe

hee

“Gut WEALTH oF WATIONS.

if orgy 9d ria moon used swisd bad ¢

ain favour of the vineyard. In France
f Taal File fh ©; i ak yineyarde: te prevent.
a, rane x8 favor: their opinion and
(9 in thofe. who nuwft:have the experience,

oft UfeiV thon ip-at prefent' if that-country: more
ibe than thy? thet, Ie feem bt the me, time, ow.
"otitis ; ee eat tht pat on
PRO the fie,
=

Years, i, ey ht iP ;

the king; to be granted. -p only, int comfequence of an, saftepation
from the intendant of* the provirice, certifying that he had exa-
mined, he, dand,. am jit wat: incapable:of any. other culture.

The prstence.af this order was. ity. of..corn:and pa(ture,.and,
the Gaperzabundance.of wins.;. Bus had, this fuper-abundance been
real, it ,would, .without,-any..order . of; council, have ,cfiectually
comers ¢ plantation pf new.vineyards, by reducing the profits of

thigi (peciea-of cultivation, below. theis. natusal propostion. to thele of

comand, patture,... With, segasd, tothe. fuppofed:.(cascisyiof com.

ocgafioned by the: multiplication, of vineyards, ‘corn is. no where
in. Fxance. more carefully cultivated than in. the wine. provinces,
where, the Jand..is,fit for producing. its a3, in, Burgundy», Guienne,
and, the Upper Languedec.:,; The: numerqus, hands, employed. i in
the ne: fppcies of cultivation, necaffarily, encourage., the; other, by
affording a ready, market. for. its._produces.. To.diminith.the number
of thofe whe are capable of, paying for it, is farely a moft unpromifing
expedient. for encouraging: the cultivation of corn, It. is. like the

Vor. I. Cec policy

wi p oneericultitre,. jailer the ¢c iF.
Oe cis fecm, generally: dipole. eat

ae
a

THE) NATURE AND | CAUSES HOF
ie which, would, promote agriculture: by difeotraging) marian.

elt ltiw tok 4 HOMMSq MOD Ott tH grond: sc | nbs oy itees

fonAK Hiei inabws eu wileup tRilwood

THe rent and profit of thofe productions, therefore, which
require ‘cither-a ‘greater ein ete OF imhiptovemenit” int ‘otder

to. fit the’ land ‘for them; ‘GY! a! gtéaté annual expence! of culti-
vation, though often ‘much fapetior: to thofe’of' corn ‘and jpafture,
yet when ithey dono *ttiore ‘thati' tompenfate. fuch ‘extraordinary
_ eupence, :are/ iy: (strat pe searp tic ‘as a ver Of ‘tho
common sions oul} eonnypre Ith lism 5

tr feed ‘nappa sc ‘tie the: Guay oF and
which’ cam be ‘fitted for {ome particular ‘prodtice)’ #'tod' ‘final to
fupply “the effetual demand: The awhole’ prodidé® tar “be aise
poled of to thofe who are’ willing’ ‘to give foriéwhat’ thore than
what. ix: fufficient to: pay ‘the’ whole rent)’ wages,’ ard’ profit nes
eeflary ‘for: raifing “and. bringing ‘i it to market,’ according’ to their
eaten 8 or -‘wecording to) the! rates? at which'they até ‘paid

fn! the ygreatel ‘pure oPother! Cakivated andioo The firphas? part
of the: pricecwhich: remain’ after’ deftaying the whole expence of.
imhproveinent’ and» cultivation’ may" conimionly,? in this! cae)and:
in :this:cafe. only; ‘bear no regular: proportiot. to:'the'like’ furplas.
in corn lornpafture; i but may ‘exceed tit, im dimoft anydegree:s’ sind:
the: a ee this: moe bac ot to therrent of the.
preter siorit bsnons2o pin oF

“Tie tnbiit and” natural: proiainiayon for’ deli Between! the
fent and profit ef! wine°dnd''thofe of corn and* pafture;: ‘matt be
tniderftood ‘toi take plage only’ with: regard to thofe' vineyards whicli.
produce nothing but good common wine, fuch as can be'raifed
almoft bail where yi any light,, gravelly, or fandy foil, and
which no to recommend i it but its ftrength and si

MOJO pg @ SB.

be)

ot sg ghee Sw

‘- ~ wr~«, ws. 8 a.UlcaeeEr

WHET WEALTHA OF NAT ONE

105

ivfes x Ipis with fuch wineyards oply thatthe common Mid oF thé CHAP.
country can be brought into competition; for with thofé'6F'a CA

peculiar quality it is evident that it cannot.

douiw solos yenottouborq sled) to Joi Das yy ant
ofkdth, Ving 48 more affected .by.the difference, of ..foils than any
other fruit, tree... Exam fome,it derives a flavour which no; culture
ar management can equal, it is fuppofed, upon any other. This
flavour, xeal,or imaginary, is Sometimes. peculiar,to the produce of
ai faw vineyards;s fometimes it extends, throngh:the greater. part of
a fmall diftriét, and fometimes through a confiderable: part:‘of.a
large province. The whole quantity of fuch wines that is brought
fo. arket, falls. port of the effectual demand,, or.tha demand of
that. whe. woul abs willing, to, Ray the whole, Fenty profit, and
wages. necefiary for preparing and bringing. them, thither, :according
to. she ordinary, rate, ; or, according |to, the; rate. at;which they:.are
paid in, common, vineyards, The, whole, quantity, therefore, can
be, difpofed of $0, thofs. who peg pacstin pay:moxe, which necef-
farily railes.thein price above that of common. wine. .. The difference

is, greater on lefg according as, the fafhionablenefsend fcarcity of the

wine, render. the competition..of the buyers: more or Iefs eager.
Whatever it,be, the greater part,of;,it: goes to the rent of: the land~
lotd.:::Forthongh fuch vineyards. are. in general':more: carefully
cultivated:than moft others,’ the» high: priceof.the!'wineofeems to
be) notfo much the:effect,' as the caufe ‘of this careful cultivation:
In fo valuable a produce the lofs occafioned by negligence is fo
great as to force even the moft carelefs to attention. A {mall part
of this, high price, - therefore, is, fufficient, to pay the wages of the
extraosdinary, labour. beftowed upon: their: cultivation, and the
profits of. the extraordinary. ftogk..which puts .that, labour: into
motion, , iG: atom soubo1g

{

“tae fagar colonies poffefied by the European, nations in the
Welt Indies, '‘may'be compared to thoie precious vineyards, ‘Their
Be : Cc2 | , whole

tof THEONWATURE OAD ICAUSES (OF

BROE whale predate falls Purp vol she adedual wensod! of. Bunge, wand.
best canibe diffoled of to thoh whoare willing to give thete' than whet
is fufficient to ‘pay the! whale vent): puofit;: and wages :neoeflaty ifor
preparing)and bringing it to: market, a¢cording to the rate at which
they! are’ comniontly “paid'by!any ‘other produces: In Cochinschina
the 'fineft white fligar commonly Yells for three piaftres the quinkal,
about thirteen fhiflings and fixpetice of our! money, “as we'are told’
by Mr. Poivre, a very careful obferver: of the:agriculture ofthat
country. What is there called the quintal weighs from a hundred
and fifty to:two hundred Puris pounds, ora hundred andi feverity-
five ‘Paris pounds ata) medium, which’ reduces the:price. df the:
hundied ‘weight ‘Englify td. about eight: fhillings: fterling;:!notvia:
fourth part‘of what is’ commonly paid for: the brows ot mulkavada:
fogars ‘imported frony oti colonies) and ‘not: a°fixth: partiaf: what:
is paid forthe finelt white fagdr.» "The: greater. "partiof tHe ulti
vated lands in (Cochin-dhina. are ‘employed in. producing cory: did
ride)’ the’ food. oF the ‘grént? body’ of the peopte.’'' The 'refpedtive-
prices! of corn, rice,"atd fugit, ave there iprobably inthe. harordli
proportion; ' or in that*whidh wafuyally takes’ place int she different:
ctops of the greater part Of eultivared Mid, “aid whic 8
the lahdldrd’ arid farmer. di 'iieatdy as “carl be domputel, accordiity
td what id ‘tifually ‘the original’ &xpence’ of ittiprovetiient. and2the:
ahnuial étpetice of cultivation: ‘But-in' our fligar colonies: da price:
of fugat bédrs rid fiich’ prdpertionto that’ oF the: produide Uf airiee-
dr corn file either itv Europe! Gr if Ameritas’ Tti¢icommonly tid:
that a fagar planter expefts that the ‘rum’ and ‘the’ molaffes fhould:
defray’ the whole expente ‘Of: his’ cultivation, ‘and that’ his. fugar.
fhotild be af cléar’ profit: If thid ‘be! ‘tre,’ for I pretend: otto
afin it) it'ts. asdf @/ corn farmer expected” to’ defray the expences -
of his‘ cultivation’ with the:chaff.and the. {traw, ‘and.that' the. grain ;
thouild ‘be all ‘clear. profit. 'We {ee frequently: focieties of merchants ;
in ‘Londdn ‘dnd ther trading ‘towns, . purchale. wafte. Tandy. in’ ie

, S| @& ese @ =" 2S a th

—
=

mSmeeieemene & wm -

DIS ‘

tro 4

|
7a ee

\
3
s.
e:
e:
e
a
id

i a a

WH SAWRALDHAOSs WAI OBME7

Woy

Sirger sobonite, which they expedito improve andi cultivate with profit aBnSP.
byrencans ‘of: fafbors ‘and: agents; notwithitantling the great diftance ayy

eatl the! wncertain: retarns;' from the defettive adminiftratidh | of
jiltice-‘m: thofe. countries, Nobody: will: attenipt to ‘improve and
caltivate inthe: fame manner the moft: fertile lands of Scotland;
Ireland). of the ‘corm »provinces' of » North America 3: though: from
the! more exact admmiftration of: a thee. oN more
regular retuinis cate be. a

boiubauil & prot) r ipth up odt boll

flee Winginie dnd Maryland: the phe of ponies is\ pres

@irred, »as more -profitable, ‘to. that! of: corn, : » (Eobacco:. might
Beiconitivatdd: with: advantage through: the'-greater part of Buz
sopey/but in almoft every. part of! Europe it: has bécome a: prins

cipal fubject of; ‘taxation, and to. ¢olle&..arter ftom. every, difé.

ferent -farra.in the country, where this) plant, might happen. to, be
cultivated, .woukl, be: more, difficult, it hagibeen| fuppofed,. than) to
Jevy-ons, upow its importation. at, the cutom-houfs. |, The, cultivas

Monof tobaccovhas.upen, this account been, moff. abfurdly, prohi
hited’ through the rico part of Europe, which neceffarily, gives a.
fort of mnonopoly.to;the. countries where)it is.allowed ; and; as. Vire-

giniacand Maryland: produce the.greateft quantity of it, they thare:

dargelys shengh with: fome. competitors, in the advantage. of this.
qaonopolys ;; be: cultivation, : of, tobacco » bowever,.,. feems, not, to:
bie: ailvantagoons. 98-that.of fagar.,. 1,have; never, even: heard of:

aay. tobacco, plantation, that:,was: improved.and, cultivated. by. the:

gapital.of. merchants, who refided. in Great Britain, and our tobacco.

colonies: fend, us,,home: no fuch, wealthy: planters. as we. fee. fre--

quently arcive: from,our fugar. iflands. . Though from the preference :

given. in thofe colonies to. the cultivation, of tobacco above, that..of °

germ, .it would appear that the. effectual: demand. of. Europe, for

tobacco is not, compleatly fupplied, it probably. i 1s. more nearly, fo.
than, thas for {agar :., And. though. the sparen (Bigs, of tobacco ae

nd |

probably more than fufficient to pay the who! rent, wages, a

profit .

THE) NATHRED AND | GASES OF

Profit nesellary. fr preparing, and. bringing it, to.market acconding

ta the. rate, at which they, ars commonly paid in cacn land 4) it must,
' not be fo much more as the prefent price of fugar. ,. uu, tobacco

= accordingly, have fhewn the fame fear of the fuper-abun-
dance of tobacco,’ which, the, propritors, of the, old. vineyards yin
France have of the fuper-abundance of wing, . Byatt, of aflembly
they have rettrained its, cultivation ta fix thoufand plants, fuppafed
to Field a pa weight of tobacco, for, every, negro...bet ween,
Gixteen and fixty. years of: age... Such, ¢ Mesto, seu above, this
quantity of, pits can, manage, they reckon, four acres of Indian
corn... To prevent, she market, from, being owerstecked. toa. they,
have fometimess in, plentiful yearg, we, are. told by Dr,, Douglas,
(I “falpedt, he has been, ill informed), burnt a » certain quantity
of, to ated for, every, EBT», in, the fame,, manne, as the, Dutch.
arg. fa to.do of fpices, i If, fach, violent, methods are neceliary, to,
keep up 1 the prefent price of tobacco, the fuperior, advantage. of jite,
culture oyer that of corn, if it ftill has anys swill not probably, be
ong <parinuance,

Rihvie rel fa Khryyeny saga
Ir is in this manner that the rent of the cultivated land, of
which the produce is human food, regulates the rent: of the, greater
part of other cultivated land. No particular .produce,;can) long.
afford fefs ; becaufe the land would ; immediately be; turned, ta:
another ufe: ‘And if any. particular produce commonly ,affords
more, it is becaufe the quantity of land which can: be we fos it-is
too {mall to fopply t the effectual depnand,,
1 1? BTIOC VBI
lw ‘Beltae torn is!'the principal welt ce of land whieh Serves"
imamedistely.:for shuman :food) olExcept in _ patti! fituations!’
therefore, the: rent of corn land regulates in Europe’ that’ ‘OF all
and ‘sultivatedslands -Britairi need ‘envy neither the vineyatds' ‘of
fae ngy thecolive plantations’ of Italy... Except-in' particular’
hats sy fituations,

S22 O2HR Penn es |

‘

7 82 WRAL EH OF WA ots]
Seukeene, dic vile Of thet Heetilitted by ‘that Of corn, ta Which!

tery wear onstacr cae oe

ee CBdntties. iil wig, 199} ny
~nuds-19qut of) 10 1H9) oetiBl oy AN BA YIQRGm eoMIG
“CT pH aily’ cbtthtty ‘the Sanaa and favouitlte ve able food of
He! Pebble Thotld be dtiwh froma Pint ef Which’ the moft com.
hive Ma, “Wiel iche Yaine’ dy daily’ the faime’ Gultiite, ‘produced a
iit Prebiter “quantity “that” the’ molt fertile does “of corn, the
rete oF the Wiidlord; dr the furpliis quantity of food which would
retitaitl t6 fait Wfter pg the’ Inbout aind replacing the ftock“o
the fanivier tc With its ordinary’ profits, wotlld ‘niéceffarily be
muuch preater,' (Whatever witd‘the fate at Which labour was com:
monty itiabivtaitied in that country, this greater furplus could always
riaiitdin’ “d gteate? quantity of ‘it,’ and donfequently enable the
landline? +Y pitch 6F'cbimintinit 4 greatet quantity’ of it. The
real. Value! oF Hiv'retit, "his téal power anit atithiority, “his command
ot ene ikea a votivenieneiés of ‘ife with which’ the labour
£ other people could fupply him, would neceffarily be’ much.
grate. | |
to (br bstnvatot I 12 / :
AOR CE fidld ener _ ih ina of” food’ than the
mio! fertile” edit field.” Two” ‘crops ‘in the year from: thi

fitty? buitels each)" kre Wild td 'be ‘the ordinary produce of bia ,

atte, "Though its cuiltivation, ‘therefore, requites. more: labour,

-a’intugh) greater ‘furplus: rethams after maintaining, all that rae

In thofé rice countries, therefore; where tice 78 thé. common ai
favourite vegetable food of the people, and where the: carn
are, chiefly maintained with \it,,'.a greater’ fhare of this greater
furplus. fhould. belong to: the Jandlord: than in: corn countries:? "fri:
Carolina, where the planters;, asin other Britith colonies; aie pene>
rally, both farmers and landlords, and: whefe_ rent confequently is:
centonnce? sting, the: dultivation: of: rice is found taibemiore:
roiteuta profitable:

299 THE NAFURE AND CAUSES: QF

BOOK profitable than thatiof carn, thongh.thein finds produce only: one

——~ arop in theiyeats -and shough,, from the prevalanen of. the: cuftams
.of Europe, rice is not there the common and valtmcraen sh
ifood of the people.

‘A, enop. rice: field i¢, a.bog at allifeafons, andiat; one fesfon a
ibog. covered with water: It is; unfit. either for coms of pafture,
on. vineyard, oF, indged,, for any. other. vegetable, produce that: is
very, uleful to mera:, And the lands which.aye fit, for: thole; purpofes,
*are-not fit for.rice, Even in the:rice, countries, therefore, the-rent
of rice, lands, cannot regulate, the. rent, of; the, othen culsivated: land
which can never be. turned to that: produce,

Ty, fopd, produced by a field of ‘potatogs.is.not infesior in-quane
tity to that. produced by. a field. of rice, and, much fuperior te: what
is, produced. by, a, figld. of wheat, Twelve thousand. weighti of
potatges. from: an, aere, of: land ig: not, 4. greater, produce. than two
thoufand weight of wheat. Th¢ food or folid nourifhment, in-
deed, which can be drawn from each of thofe two plants,. is not
altogether in proportion to-their weight, on account of the watery
nature, of. potatoes, Allowing, however, half the weight .of this
rgot to go to water, a very large allowance, fuch an acre of potan
toes, will, fill produce fix, thoufand weight. of folid nousithmens,
three, times the quantity produced ‘by the acre of wheat. An acre
of patatges. is, cultivated with lefs expence than. an acre of wheat ;
the fallow. which generally preceeds the fowing of wheat, more
than compenfating the hoeing | and, other extraordinary, cultures
which is always given to potatoes. Should this root ever, become
in any part of Europe, like,rige in fome rice countries, the common
and favourite. vegetable food, of the people,, fo as. ta, occupy the
fame, propartion : of the Japds j in tillage which, wheat, and.othep forts
of grain for human food do at prefent, the fame quantity Of culti-

vated

(DHE; WEALPH, OBu Ne 'Pd ONS: eas

, rated dander fot aysaneh greater) number of tpeople, x,

4 Jabourers,. be genexally fed, With, potatoes, a, greater Comyany

. rile would aha ter replaging, all the ftock and. main,

tafhing all the. labour employed in cultivation. A. greater, fhare
of this furplus too would belong to the landlord. Population

‘ would increafe,, and TEA ini rife, much ere what, theysare.

" at, ‘prefent. ih inal Ay Mhiey ab vf eee gtepr eb tioy Seperate: vyrrts

is 4 Veg ara reqhir Ad, ie S5¢ eT ae Ln ays Ee erg

*, THE, land which is Gt, for potatees;| isifit for penne other

at ufeful, vegetable. If. they,,occupiedithe fame proportion: of culti«

1d vated land which, corn docs at prefent, they would regulate, in’ tlie

fame manner, the rent,-of,the greater! part of other cultivated

land. ;

ew efLBSs |) FM WORE JO ei 2001KIGY io bio Bvt baoubetg bool ait

rat | ss fome parte of: Laricathire' it ‘is | pretended T have B Been told,’

of that,trgad: of eatmelil it“ahéartier food 'for'taBoaritig people than,

wo whentand bread,sand'T have’ ' frequently heard’thé* fame! déetring

- held in-Seotlande:' Idi, however, -fomewhat' doubtful of che-trathy
: ofits; ‘Bhei¢ommon: ‘podplo! in? Séotland} ‘Who are” fell’ With dat="
ry mea)sare in ‘general: neither ‘fo: ftrong nor fo handfome as the fame
is rank of peopie in: Bihgland,’s who are fed: ‘with’ whiedtett bread,
They neither: :work ‘fo: well ‘nor: look fo ‘well; and as there is fot’
the:famé difference between'the people of fafhion in the two coun?!

re thigay experience would feem to’ fhow;” thatthe: food’ of ‘the:comhs :
at 5 mon:people in! Scotland: is ‘not:fo fuitable to the hunvan‘coniftitution:
ore agithat oftheir: neighbours of’ the’ fame ‘ranix‘in’ England) » But’
ve itrdeems: to’be orherwife’ with potatoes. The diairmen; porteitss :
me¢ andcconlheavers<in London, and thofe’ urifortiinate! women Swho'
on livesbytproftitution,: the Qrongeft: men. and: the?molt beautifal wo"
ne mefi'perhaps iri the Britifly “dominions, ‘are faid ‘to Be,” the preater’
rts partiof:ithemy!ifrom! the loweft: rank of people “in™telatid) who’
1s are: generally fed:with this root.” No ‘food’ an afford’ méré de“

ted : Vou. I. Dd { cifive

frsate

293.
a

THE NATWYRE- AND CAUSES OF

cifixe proof of its nourifaing quality, or of its peing potted
Wi— suitable to the health of the human confitution..

Ir is difficult to preferve potatoes through the year, and 4 inno.
fible to ftore them like corn, for two or three years together.
The fear of not being able to fell them before they rot, difcourages’
their cultivation, and is, perhaps, the chief obftacle to their ever
becoming in any great country, like bread, the principal vegetable.
food of all the different ranks of the people.

Par?T It.

of the Produce of Land which fometimes does, and acd déeas
not, afford Rent.

JUMAN food feems to: be the only sionals of land: which
always and. neceffarily affords fome. rent tp: the landlord.

Other. forts of produce fometimes may and: fometimes may nat, ace.
cording to diferent circumftanees, :

Artsr food, cloathing and lodging are. tlie. two:great wants of:
mankind. *

Lana in its simtaaieashies ftate can -afford the materials of cloath-.
ing and. lodging to.a much greater number of people than it: can,
feed. In. its improved {tate it. can. fometimes feed a:greater; nume.
ber of people than it can fupply with. thofe materials, at. leaf.
in the way. in which. they: requixe them, and. are willing to pay.
for them. In the one ftate, therefore, there is always a. fuper-.

abundance of: thofe. materials, which are. frequently upon that:
account of little or no value, In the other there is.often a {carcity, .

which, seasons — their. value. In the. one. ftate.a great
4, part

sy fF ef wee we

o> Oo =

hi:
4.

.
v wr

THE WEALTH OF NATIONS.

part of them: is thrown away as ufelefs, arid the price of whafis ufed
is confidered:as: equa? only to the labour and expence of fitting it for
ufe, and can, therefore, afford no rent to the landlord. In the
other they are all made ufe of, and’ there is frequently a demand
for more than can be had. Somebody is always willing to give
mofe ‘for every part of them than what is fufficient to pay the

expence of bringing them to market. Their price, therefore, can
always afford fome rent to the landlord.

Tue fkins of the larger animals were the original materials of
cloathing. Among nations of hunters and fhepherds, therefore,
whofe food confifts chiefly in the flefh of thofe animals, every man
by providing himfelf with food, provides himfelf with’ the mate-
rials of more cloathing than he can wear. If there was no foreign
commerce, the greater part of them would be thrown away as
things of no value. This' was probably the cafe among the hunting
nations of North America, before their country was difcovered
by the Europeans, with: whom they now exchange their furplus
peltry, for blankets, fire-arms, and brandy, which gives it fome
value. In the prefent commercial ftate of the known world, the
moft barbarous nations, I believe, among whom land property is
eftablifhed,: have fome foreign commerce of this kind, and find
among their wealthier neighbours fuch a demand for all the ma-
terials of cloathing, which their land produces, “and which can
neither be wrought up nor confumed at home, ‘as raifes their price
above. what it cofts to ‘fend them thither. It affords, therefore,
fome rent to the landlord. When the greater part of the highland
cattle were confumed on their own hills, the exportation of their
hides: made the moft confiderable article of the commerce of that
gountry,.and what they were exchanged for afforded fome addition
to the rent of the highland eftates. The wool of England, which
in old: times: could:neither be confumed nor wrought tip at home,

Ai Dd2 found

roy
€ HA Pp.
enya

nog

THE NATURE AND ‘CAUSES OF

BOOK founda market in the'then wealthier and more induftrious:country
w—~ of Flanders, and its price afforded fomething to the, rent of the land.

which produced it. In countries not better cultivated than Eng,
land was then, or than the highlands of Scotland are now, and
which had no foreign commerce, the materials of cloathing would
evidently be fo fuper-abundant, that a great part of them would

be thrown away as ulele{s, and no part could afford. any rent to:

the landlord.

. Tue materials of lodging cannot always be tranfportedi to:

fe great a diftance as thofe of cloathing, and.do,;not fo readily
become an object of, foreign commerce... When, they, are fu-
per-abundant inthe country which produces. them, it fres
quently happens, even in the prefent commercial ftate of the
world, that they are of no value to the landlord. A good ftons
quarry. in:the neighbourhood of London would afford a confider=
able rent.. In, many parts of Scotland and, Wales'it. affords none:
Barren timber for building is of great valuein.a populous and well=
cultivated country, and the.land. which produces it, affords a:con-
fiderable rent. But.in. many parts, of North America:the land-
lord. would be. much obliged to.any body, who: would carry away
the greater part.of his largetrees. In-fome parts of: the. highlands

. of Scotland. the bark is.the only part of the wood which, for want

of roads and water-carriage, can be fent to market. The: timber
is left to rot upon the. ground, When. the: materials:of: lodging
are fo. fuper-abundant, the part. made. ufe of. is:worth only the
labour and: expence of fitting, it. for that/ufe. It affards -no ‘rent
to. the landlord, who generally. grants the. ufe of it.to whoevep
takes the trouble of afking it. The demand of. wealthier:nations,
however, fometimes enables. him to get arent for it. The paving
of the ftreets of London. has enabled the owners of fome batren
rocks on the coaft of Scotland to draw a rent from what’ never af-

F : | forded

> oes Pm om eS

ee nd

eromnewes

GS =

‘THE WEALTH OF NATIONS,

forded any ‘before. ‘The woods of ' Norway ‘and of the coafts of ona P.
the Baltick; find:a market in many parts of Great Britain which G-y——

they. could not find at home, and thereby afford fome rent to their
proprietors. :

“CounTrRies are populous, not’ in proportion to the number
of people whom their produce can cloath and lodge, but in proe
portion to that-of thofe whom ‘it can feed. When food is pro=
vided; it is eafy to find the neceffary cloathing and lodging. But
though: thefe are at hand, it may often be difficult to find food,
In. fome: parts'even of the’ Britifh: dominions what is called A
Houfe, may be built by one day's labour of one man. The fimpleft
{pecies of ‘cloathing,’ the'fkins of animals, requires fomewhat more
labour to drefs and prepare them ‘for ufe. ‘Fhey donot, however,
require a great deal. Among favage and’ barbarous nations, a2
hundredth’ or little: more‘'than’a hundredth’ part’ of the labour of.
the whole: ‘year, ‘will be fufficient to: provide’ ‘them! With fuch cloath=
ing andvlodging ‘as fatisfy the greater part’ of the people. ’ All the
ether ninety-nine sbi are Seieeriiny no more than enough to.
peovide them with food: *

fih>*

“Bur whien by. the i improvement and’ cultivation of land the la».
bour of’ one family can provide food for two, the labour of half the
fociety becomes fufficient to provide, food for the whole, . ‘The:
éther half therefore, or at leaft the’ greater part of them, can be-
employed iit providing other things; or in Yatisfying the other wants
and fancies of mankind. Cloathing and lodging, houfehold’fur-
niture; .and what is called. Equipage, are the- principal objects of.
the greater part of thofe wants and fancies., -The -rich, man cone
fumes no..more-food . than his. poor neighbour. An quality ir may:
be. very., different, .and. to fele@ and, prepare it may ‘require-more:
labour and. art. but in quantity it is very nearly. the ‘fame... But:
compare:

206

THE NATURE AND CAUSES OF

BOOK compare ‘the ‘fpactous palace antgreat wardrobe af the one; with
pie a the hovel and the few. rags of the other, and you will be fenfible

‘that ‘the difference between theit cloathing, lodging, and: houfes

‘hold ‘furniture, is almoft as great in quantity as it is in quality,

The defire of food is limited in every man by the narrow capacity
“of ithe human ftomach; but the defire of the conveniencies, and

ornaments ‘of building, drefs, equipage, and houfehold furniture,

‘feems'to have no limit or certain boundary. Thofe, therefore,
‘who have the command of more food than they themfelves can
‘confume, are always willing to exchange the furplus, or, what
is the farae thing, the price of it, for gratifications of this other
kind. What is over and above ‘fatisfying the limited defire, . is
given for the amufement of thofe defires which cannot be fatisfied,
but feem to be altogether endlefs, The poor, in order to obtain
food, ¢xert themfeves to gratify thole fancies of the. rich, and to
obtain it more certainly, they vie with one another in the cheap-
nefs and perfection of their work.. The number of workmea in-
creafes with the increafing quantity. of food, or with the growing |
improvement and cultivation of the lands; and.as the nature of
their bufinefs admits of the utmoft fubdivifions of labour, the
quantity of materials which they can work up, increafes in a much |
greater proportion than their numbers. Hence arifes a demand
for every fort of material which human invention can employ,
either ufefully or ornamentally in building, drefs, equipage, or
houfehold furniture; for the foffils and minerals contained in
the bowels of the earths the precious metals, and the Precious,
ftones.

Foon is in.this manner, net only the original foutce of rent,
but: every other ‘part of the produce of land which afterwards
affouds renit, derives that part of its value from the'improvement of
the powers of labour in producing food by micans of thet improve-
ment arid. cultivation of land,

TuHost

—sSs Uc ceellCUD

THE WEALTH OF NATIONS,

Tnose other parts of the produce of land, however, which CHA Pe.
afterwards afford rent, do not afford it always.. Even'in improved U-+—.

andi eultivated: countries, ‘the demand 'for them is. not always fuch
as to afford’ a: greater’ price: than what is fufficient:to pay the la-
Hour, and replace, together with its ordinary. profits, the ftock
which muft:be employed ia bringing them to market. Whether:
itis.or is not.fuch,,depends upon different.circumftances...

WuernHer. a. coalmine, for example, can afford any: rent;.
depends partly upon its fertility, and partly upon. its fituation..

A mtne:of any:kind’ may be faid'to be either fertile or: barren,
according: as the quantity of mineral.which:can be brought from it
hy. a certain: quantity‘of labour,, is greater.or lefs than what: can
be brought:by. an: equal quantity: from the greater ‘part: of. other:
mines. ofthe: fame. —

Some’ coal-mines. i advinlagetatty fituated} cannot: be: wrought:
on account of their barrennefs, The produce does not pay the
expence.. my can-afford neither profit nor rent..

“Times: are fome of: which: the produce: is barely f fufficient to:
pay the labour, and replace, together. with its ordinary profits, the:
ftock employed in working them: | They afford fome profit:to the:
undertaker of: the work, but: no -rent:to the landlords. They can;
tie wrought advantageoufly by nobody but.the landlord, who being,
himfelf undertaker of the. work, gets the. ordinary profit: of. the-
capital which he employs in it.. Many:coal-mines in Scotland are:
wrought.in this manner, and .cat:be wrought. in no other.. The-
landlord ‘will allow no body: elfe to work.them without paying fome-

rent, ; and no bol can afford to pay anys:

OTHER:

THE NATURE AND, CASES:

OTHER coal-mine3 in the fame country iy punt ue » Cane
not be wrought on account of their fituation, A quantity of mineral,
fufficient | to defray the expence , of working, could be. brought;
from the mine by the ordinary, of oF, eyen lef than the ordinary,
quantity of Jabour : But i in an inland country, thinly inhabited,
and without either good roads or Miia ialbiedtl this, quantity
could not be fold. eee ee Thy

the _

syr dtp
Coaxs-are a'lefs agreeable, fewel than wage duel ane, huid pe to
be les, wholefome. .. The, expence of, coals, therefore,).at the place.
where they are confumed, muft, generally, be fomewhat Jefs\than
that of wood, 05. ot We Sena is evasliacduk Ho
wicca sagt deg henge Ny!
Tue, price of pata again , alias with the. ftute of; agriculture,
nearly. i in:the.fame manner, and exactly. for the fame reafori, .as/¢he’
price of cattle. .In. its) rude beginnings, the greater, partiof, evety:
country is covered with wood, which is then a mere incumbrane: of
no, vaine to. the Jandlord, ,»who would. gladly: Bive. it to any body for
the. cutting, , As, agriculture advances, the woods/are,partly cleared.
by the progrefs of tillage, and partly go to. decay. in confequence; of.
the increafed number of cattle. Thefe, though they do not increafe
in.the fame) proportion as corn, which,is altpgether the.acquifition
of. human induftry, yet multiply.under the care jand prote¢tion .of,
men ; who ftore up:in_ the, feafon of . plenty, what, ‘may: maintain,
them i in that of fcarcity, who through the whole, year furnith them,
with a greater quantity of food than uncultivated. nature’ provides:
for them). and who. by deftroying and extirpating,. their enemies,.
fecure them in the, free, enjoyment of all that fhe provides, :Nur,
merous herds, of cattle, when allowed. to wander through the, woods,,
though they, do not deftroy the , old. trees,, hinder, any young.ones;
from coming up, fo that i in the courfe.of. a century .or ;,two. the.
whole foreft Goes to ruin. The {carcity of wood then raifes its
price.

oo JZ

bet

~A7F C0 6 ft

— et > ee

THE WEALTH OF NATIONS,

209

price. It affords a good rent, and the landlord fometimes finds CHAP.
that he can fcarce employ his beft lands more advantageoufly than ——\—

in growing barren timber, of which the greatnefs of the profit
often compeniates the latenefs of the returns. This feems in
the prefent times to be nearly the ftate of things in feveral parts
of Great Britain, where the profit of planting is found to be
equal to that of either corn or pafture. The advantage which
the landlord derives from planting, can no where exceed, at leaft
for any confiderable time, the rent which thefe could afford him;
and in an inland country which is highly cultivated, it will fre-
quently not fall much fhort of this rent. Upon the fea-coaft of a
well improved country, indeed, if it can conveniently get coals
for fewel, it may fometimes be cheaper to bring barren timber for
building from lefs cultivated foreign countries, than to raife it at
home. In the new town of Edinburgh, built within thefe few
years, there is not, perhaps, a fingle ftick of Scotch timber.

Wuarever may be: the price of wood; if that of coals is fuch
that the expence of a coal-fire is nearly equal to that of a wood one,
we may be affured, that at that place, and in thefe circumftances,

the price of coals.is as high as it can be... It feems'to be fo in fome |

of theinland parts of England, | particularly in Oxfordfhire, where
it is’ ufual, even, inthe fires of the common people, to mix coals
and wood together, and where the difference in the expence of thofe
two forts, of fewel cannot, therefore, be very great.

- Caaxs, in'the coal countries, are every where much below: this
higheft price. If they were not, they could not bear the expence
of adiftant carriage, either by land or by water. A fall quantity
only could be fold, and: the ‘coal mafters and coal proprietors find
it more for their intereft to fell a great quantity at a price fome-
what above the loweft, than a {mall quantity at the ahi The

Vor. I. Ee moft

210 THE, NATURE, AND, CAUSES, OF

299. K moft fertile coal-mine too, regulates the price of coals, at all. ithe

teins other mines in its neighbourhood, Both the, proprietor and ithe
undertaker of the work find, the one that he can get a greater .
rent, the other that he can get a greater profit, by fomewhat un-
derfelling all their neighbours. Their neighbours are foon obliged th
to fell at the fame price, though they, cannot fo well afford,it, and a
though it always diminithes, and fometimes takes away altogether
both their rent and their profit, Some works are abandoned al- *
. together; others can afford no rent, and can be its only M4. the e
proprietor. ere fe, -

Tux loweft price at which coals can be fold for any confiderable:
time, is like that of all other commodities, «tic iprice which is.
barely: fufficient to replace,, together with its ordiary: profits,! the:
ftock which mutt ‘be! employed: in ‘bringing 'themto:market, Ata:
coal-minefor: which the landlord) :can- get: rid; sent, but which he:
muft either work himfelf or ‘let’ it alone altogether, the price. of
rane pons cnc about: ee epaers ietin: bas \y

) rome dit boB8..,3h 80

mast ever: vibes colle! aiford' ‘one, ‘hae generally a: fmaller:
fhare in their price than. in that of moft.other parts‘of. the rude pro-.
duce of ‘lands: The:rent: of ‘an eftate: above ground: commonly:
amounts: to:'what ‘is fuppofed to be a\third ofthe grof produce ;.
and it is. generally a rent certain and‘independent of ‘the Occafional
variations in the crop, / In coal-mines‘ a fifth’ of the grofs: produce:
is a very great rent; a-tenth the common. rent; and it:is feldom. a:
rent: certain, but depends upon the occafional variations: in the:

_ produce. Thefe are fo:great, that in a country where ‘thirty years

purchafe is confidered as a: moderate price for the property: ‘of a

landed eftate, ‘ten’ years’ purchafe ‘is gino as a geod Pricer for.

shat of a simile

de ves

‘Tre

HE Whar tit OF NATIONS.

2ur

“OpWie Valde* Of 'a' coal“miné to the ‘proprietor depends frequently © MAP.
af indidh upon its fituation as upon its fertility. That ofa metallick ——

mine’ depends more ‘upon’ its fertility, and lefs upon its fituation.
The cdarfé;' atid‘ ftill more’ the precious metals, when feparated from
thelore, ‘are ‘fo valuable that they can generally bear the expence of
avery’ long’ land, ‘and! of the moft diftint fea-carriage. Their
market’ is not confined ‘to’ the countties in the neighbourhood of
the mine} ‘but extehds'to the whole'world. ‘The copper of Japan
makes an article in the commerce of Europe; the iron of Spain
in that of Chiliand Peru, The filver of Peru finds its’ way, not
only to Europe, but from Europe to China.

- Tue.price of coals in: Weftmoreland or Shropfhire:can have little
effect onctheir :price at. Newcaftle; and their;:price im the Lionnois'
can have:none.at all. The productions of fuch diftant coal-mines!
can ‘never be brought: into competition with one another. But
the -produétions of the moft: diftant metallick: mines frequently
may, and in fact commonly.'are.| The price, ‘therefore, :of the
coarfe, and ftill more that of the precious metals, at the moft
fertile mines in the world, muft neceffarily more or lefs affect their
price atrevery other in. it. The price of copper in Japan muft
have fome. influence upon its price at the copper mines.in Europe.
The price of. filver'in Peru, or the quantity, cither of: labour: ar: of.
other'goods which it will, purchafe there,.muft have fome. influence
on its price, not only.at the filver mines of Europe, but at thofe
of China; -. After, the difcovery of the mines of Peru, the filver
mines. of, Europe were; the .greater part of them, abandoned.
The:value of filver was fo much reduced that their produce: could:
no longer pay. the: expence of working them; orreplace, with a,
profit, the food, cloaths, lodging, and other. neceflaries . which
were confumed in that operation. This was the cafe too. with. the
mines of Cuba and St. Domingo, and even with the antient mines
of Peru, after the difcovery of thofe of Potofi.

Ee2 THE

252.
BO.QK

er
oe

THE NATURE AND ‘CAUSES ‘OF

_cEHE price, of every.metal at every mine, therefore; being regulat-
ed in fome meafure-by its\price at the moft fertile mine in the:world
that is actually, wrought, it can at the greater. part of mines do
very little more than pay the expence of working, and. can feldom
afford: a very high rent, to. the, landlord. .:::Rent,,: accordingly,
feems at the greater part, of mines to.have ‘ut a fmall fhare in the
price, of the: coarfe, and ‘a ‘ftill’: fmaller, in that of the precious
metals. - Labour and: profit oe “P the eraser part of both, .

A $ixTH part of the tots piisads may be sebhone thee average
rent of the tin mines of Cornwal!, the moft fertile that are known
in the !world;- as’ we ‘are' told ‘by the’ Reverend Mr. Borlace,
vice-warden ‘of the ftannaries.’ ‘Some, ‘he fays, ‘afford more; anid
fome do not afford fo much. A fixth part of the grofs pro-
duces the'rent too ‘of ‘feveral vety fettile lead mines tnt Scot-
Jand.

'IN the’‘filver' mines of Peru, we’ are told by Frezier and Ulloa,
the’ proprietor frequently exacts no other acknowledgement from
the undertaker of the mine, ‘but that he will grind the ore at
his ‘mill, paying him the ordinary multure or price of grinding,
The tax of the king of Spain, indeed, amounts to one-fifth of
the ftandard filver, which may be confidered as the real rent of
the greater part of the filver mines of Peru, the richeft which
are known in the world. If there was no tax, this fifth .would
naturally belong to the landlord, ‘and many mines might be
wrought which cannot be wrought at prefent, becaufe they can-
not afford this tax. The tax of the duke of Cornwal ‘upon
tin is fuppofed to amount to more than five per cent, or one
twentieth part of the value; and whatever may be his. proportion
it would naturally too be!c:.g to the proprietor of the mine, if: tin
was duty free. But if you add one-twentieth to one fixth, you

will

THE ‘WEALTH OF NATIONS,

will! ‘find :that' the: whole average rent’ of the tin mines of Corn-
wal, isoto ‘the whole ‘average vent of the filver mines of Peru,
asthirteen to twelve’) The high tax upon’ filver too, gives much
greater temptation to fmuggling than ‘the low tax upon tin, arid
fmuggling mut be much eafier in ‘the ‘precious ‘than in the bulky
commodity.: |: The: tax! of the king of ‘Spain accordingly ‘is faid
to, be:very ill paid, and, that of the! duke of Cornwal very: well.
Rent, therefore; it is probable, makes a'greater: part of the price
of tin at the moft fertile tin mines, than it does of filver at the
molt..fertile Giver; mines in. the world... After, replacing, the; {tock
employed in. working ,thofe. different ,mines,,, together,,with its
ordinary, profits, the refidye which remains to the proprietor
is greater it, feems in the coarfe than in the precious metal.

wos ¢

“Narrner, are ‘the, profits of the nodesekatn of. filyer mings.

commonly very great in Peru. The fame. moft refpectable and
well informed authors acquaint us that when any perfon under-
takes tom work a new mine in Peru, he is univerfally looked Upon
as a man deftined to bankruptcy. and ruin, and is Upon that ace,
count fhunned 2 and avoided by every body, Mining, it feems, is
confidered there in the fame light as here, asa lottery, in which,
the prizes do not compenfate, the blanks, though the greatnefs

of fome tempts , many adventurers to throw , away their _ fortunes,

in fach’ nprofperous projects, ee

‘As the fovereign, however, derives a confiderable part of his
reventic from the produce of filver mines, the-law in Peru gives
every poffible encouragement to the difcovery and working of

new lones. “Whoever difcovers a new mine, is efititled to meafure _

off two hundred ‘and forty-fix feet in length, according ‘to what
hé’ fuppofes' to be the direction of the vein, and half as mich i in
Dice, ‘He becomes proprietor of this portion of the mine,

Lis

gain
r

it PARQ FIR fh

a . ‘ and «

213
CHAP,
uw ~~!

‘NATURE? AND CAUSES!

THE

' andcan: work it; without paying: any: ‘acknowledgement! to’ the:
landlord:) The:intereft.of the duke: of \Cornwal has? Given’ ‘docu
-cafion: to a: regulation nearly oft:the fame kind in that«antient:
dutchy, In wafte and. uninelofed lands any: perfon-who: difs
covers a tin mine, may mark» out! its limits, to'a: certain” extent;
which is called bounding a mine«.: ‘The: bounder bécomes ‘the:.reai
proprietor. of, the mine, and: may either work:it him/felf, or give it:
in: leafe to another, without the:confent .ofithe owner of>the: land;
to whom, however, a very fmall acknowledgement muft be paid
upon working it. In. both. regulations the facred rights of pri-
vate property: are: faerificed tothe fuppofed: interefts of ee

revenue, i

Tue fame encouragement is given in Peru:to the difcovery' and
working of new: gold uminess and in goltl:the’king’s ‘tax amounts
only: toa twentieth part-of the ftandard ‘metal. It wasonce’'d
fifth, as in filver, but it was found the work could not bear it.
If it is rare, however, fay: the fame authors, Frezier' and ‘Ulva,
to find’a perfon who has made his fortune by a filver, it-is ftill
much) rareriito: find one: who has done fo by a goldmine; '” This
twentieth part {eems to: be the whole rent which ‘is’ paid by” the
‘greater part of the gold mines in Chili and Peru. Gold ‘too ’
is}, muchicmore liable to be {muggled than ‘even filver ; ‘not only
en account of the fiperior value ‘of the metal in proportion to
its-bulk, but on. account of the peculiar way’ in which naturé
produces it, Silver is very,feldom found virgin; but, like moft
other metals, is generally mineralized with fome other’ body, from:
which it is impoffible to feparate it in fuch quantities as will pay.
for: the 'éxpence, but ‘by a very laborious and tedious ‘operation;
which'eannot : well:.be carried on’ but in workhoufes. ereéted: for.
the:purpofe, ‘and therefore¥expofed. to the infpection :of ‘the’ king’s,
officers.: Gold, on the contrary, is almoft always found virgin. It is
ali . fometimes,,

(
(
F
I
(

THE WEALTH: OF NATIONS.

fometimes found jin» pieces of fome bulk: and even’ when mixed

in.fmal) and. almoft infenfible particles with fand, earth, and other aoc

extraneous bodies, it canbe feparated from them by a'very*fhort
and. fimple operation; which can be ‘carried on ‘in any private
houfe by :any) body whois poffefled’ of a fmall. quantity of mer-
eury. If the king's tax, ‘therefore, ‘is: but ill’ paid upon filver;
it is likely to be much 'worfe paid: ‘upon, gold; ‘and rent muft
make'a much fmaller iti of the ate of gold, sean even’ of that
of | filver.. el
gd Wied: M Se Og

Tae. lowell: price at which’ the ' precious! metals ean: be fold, ‘or
the fmalleft quantity of other goods for which they can be ex:
changed. during, any confiderable time, is regulated by the fame:
principles. which, fix.:the loweft:ordinary::price: of all other gootls..
The ftock which, muft.commonly be employed;the food, cloaths;:
and., lodging, + which:-muft::commenly ibex:confumed in bringing
them from, theimine:to.the market, determine it. It muft at leaft
Be fufficient to. impltce that tock; with eee sepia Tan

Pasin highett price, owen; foband mot: to: be praiesth diters:
mined by‘any thing but the actual-{carcity ‘or plenty of thofe metals:
themfelves, It.isi not determined by that.of any other commox:
dity,in the fame manner:as the price of coals>is by thatvof! weodpi
beyond, wkich no fearcity can ever raife itt; Inereafe the: fcarcity”
of gold to.a/ certain degree, and the {malleftbit-of it may become:
more precious than a-diamond, and exchange for.a pee aay
of..other, goods.. tt +

‘Tne. demand for thof. motalbatife partly from: their utility,‘an and:
partly from-their beauty. If you except iron;: they are:more ufefuk! —
than,, perhaps, any other metal; As-they are ‘lefe:hableto:ruft: —
and. impurity, they can-more cafily be: kept: cléam; andthe. uten

i ’ 4. fils;

THE NATURE AND CAUSES OF

fils either of the table or the kitchen are often upon that account
i— more agreeable when made of them. A filver boiler is more
cleanly than a lead, copper, or tin one; and the fame quality

would: render a gold boiler {till better than a filver one. © Their
principal. merit, however, arifes from their beauty, which renders

them peculiarly fit for the ornaments of. drefs and furniture. No

paint or dye can give fo fplendid a colour as gilding. ‘The merit

of their beauty is greatly enhanced by their fcarcity. With the

greater part of rich people, the chief enjoyment of riches con-

fifts in the parade of riches, which in their eyes is never fo com-

pleat as when they appear to poffefs thofe decifive marks of
‘opulence which nobody can poffefs but themfelves, -In their eyes

the. merit of an object which is in any degree,either ufeful or
beautiful, is greatly enhanced by- its fcarcity, or by the great

labour which it requires to collect any confiderable quantity of

it, a labour which no body'can afford to pay but themfelves. Such

objects they are willing to purchafe at a higher price than things

much more beautiful and ufeful, but more common. Thefe qua-

lities of utility beauty, and fcarcity, are the original foundation

of the high price of thofe metals, or of the great quantity of

other goods for which they can every where be exchanged. This

value was antecedent to and independant of their being employed

as coin, and was the quality which fitted them for that employ-

ment.. That employment, however, by occafioning a new de-

mand, and. by diminifhing the quantity which could be employed
in any other way, may haye afterwards contributed to keep up
or increafe their valug,

a ee oe ee a a ee

~> >

> 2 A me

~~ 8 § ot be

Tue demand for the precious {tones arifes altogether from their
beauty.. They are,of no ufe, but as ornaments; and the merit
of their beauty is greatly;enhanced by their {carcity, or by the
difficulty and expence of getting them from the mine. Wages
7 and

Qf O &

(HH Ey WEALTH, OF, (NATIONS.

and profit. ascontingly, make, ups. Hpeg most. pecafions,, almoft the
whole of their,high.price. Rent.comes in. but fora very, fmall fhare ; :
frequently. for no fhare ; and the moft fertile mines ‘only, afford any
confiderable. rent. . When (Tavernier, a jeweller, vifited the dia-
mond-mines,of Golconda and, Viifiapour, he was informed that, the
fovereign, of the country, | for whofe benefit they were, wrought,
had,ordered_ all. af them.to,be fhut, up, except thofe, which yielded
the largeft and, fineft .{tones. ,,, Fhe others, , it Reape: were to the
PRODI not worth, the working, lgoaq. st
“wn lie price; both of the arccianth, swetals: and of, the precious
fronens is ;regulated( all over: the world, by their priceiat the. moft
fertile.mine din it, the rent, which. a ..ine. of either: can afford to. its
proprietor isjin proportion, not to its.abfolute,, butto what may. be
called, its relative fertility, or to.its fuperiority over other mines. of
the fame.kind..,.,1f, new, mines were, difcovered.as much, fuperior to

thofeof Potofi.as they. were fuperior, to, thofe of Europe, the: yalue

of, filyex might, be. fo. much degraded ,as to render, even; the mines of

Potofi.not worth the working... Before the difcovery of the Spanifh

‘Wett, Indies, the moft fertile mines in Europe may have afforded
as great,a.xent to their proprietor as the richeft mines in Peru.do

‘at, prefent.;, Though the quantity. of filver, was. much. lefs, it

might have exchanged for.,an equal quantity. of other goods, and
the proprietor’s fhare might have enabled him to purchafe or com-
mand.an equal quantity. either of labour or.of commodities. The
value both of the preduce.and of the rent, the real revenue which
they afforded both to the publick and to the proprietor, might
have been the fame.

Tur moft abundant mines either of the. precious metals or. of the
precious ftones could add little to the. wealth.of the world. -A pro-
duceof which the value is i derived fom i its. {carcity, is

Vou. I. F f neceflarily

THE NATURE AND CAUSES OF

neceffarily degraded by its abundance. A fervice of plate, and the
other frivolous ornaments of drefs and furniture, could be purchafed
for a fmailer quantity of labour, or for a fmaller quantity of com-
modities ; and in ‘this would confift ‘the fole advantage which the
world could derive from that abundance,

Ir is otherwife in eftates above ground. The value ‘both of
their ‘produce and of their rent is in proportion ‘to ‘their abfolute,
and not to their relative fertility. The land which produces a
certain quantity of food, cloaths and lodging, can always feed,
cloath and lodge ‘a certain number of people; and whatever may be
the proportion of the landlord, it will always give him a propor-
tionable command of the labour of ‘thofe people, and of the com-
moditics with which that labour ‘can fupply him. The value of
the moft barren lands is not diminifhed ‘by ‘the neighbourhood of
‘the moft fertile. On the contrary, it is generally increafed by it.
The ‘great number of people maintained by the fertile lands afford
a market to many parts of the produce of the barren, which they
could never have found among thofe whom their own produce
could maintain,

WHATEVEx increafes the fertility of land in producing food,
increafes not only the value of the lands upon which the improve-
ment is beftowed, but contributes likewife to increafe that of many
other lands, by creating a new demand for their produce. That
abundance of food, of which, in confequence of the improvement
of land, many people have the difpofal beyond what they them-
felves can confume, is the great caufe of the demand both for the
precious metals and the precious ftones, as well as for every other
conveniency and ornament of ‘drefs, lodging, houfhold furniture,
‘and equipage. Food not only ‘conftitates the principal part of the
‘riches. of the world, but it is the abundance of food which gives

the

._? ow

, ae ee ee. ee ee ee en. a ae

a So a Se

Of the Variations in the Proportion between the refpective Values of

THE WEALTH OF NATIONS,

the principal part of their value to many other forts of riches.

219
CHAP.

The poor inhabitants of Cuba and St. Domingo, when they were ne

firft difcovered by the Spaniards, ufed to wear little bits of gold as
ornaments in their hair and other parts of their drefs. They
feemed to value them as we would do any little pebbles of fome-
what more than ordinary beauty, and to confider them as juft worth
the picking up, but not worth the refufing to any body who afked
them. They gave them to their new guefts at the firft requeft,
svithout feeming to think that they had made them any very valu-
able prefent. They .were aftonifhed to obferve the rage of the
Spaniards to obtain them; and had no notion that there could
any where be a country in which many people had the difpofal of
fo great a fuperfluity of food, fo fcanty always among themfelves,

that for a very {mall quantity of thofe glittering baubles they would

willingly give as much as might maintain a whole family for many

years. Could they have been made to underftand this, the paffion

of the Spaniards would not have furprifed them.

Parr MIll.

that Sort of Produce which always affords Rent, and of that which
Sometimes does and fometimes does not afford Rent.

HE ‘increafing abundance of food, in .confequence of in-
creafing improvement and.cultivation, muft neceflarily increafe
the demand ‘for every part of the :produce of land which is not
food, and which .can:be applied either to:ufe or'to.ornament. In
the whole progrefs of improvement, it might therefore ‘he expected,
there fhould be only one variation in the comparative, values of

othofe twodifferent;fosts:of produce. The value.of that fortiwhich

fometimes -dloes and sfomatimes does not :afford -rent, fhouldicon-
ftantly rife\in-proportionste that which always affords fome rent.
F fa As

THE NATURE AND CAUSES OF »

BOOK As art and induftry advance, the materials of cloathing and lodg.
“w——~j ing, the ufeful foffils'and minerals of the earth, the precious metals

and the precious ftones fhould gradually come to be more and
more in demand, fhould gradually exchange for a greater and a
greater quantity of food, or in other words, fhould gradually be-
come dearer and dearer, This accordingly has been the cafe with
mott of thefe things upon moft occafions, and would have been
the cafe with all of them upon ail occafions, if particular accidents
had not upon fome occafions increafed the fupply of fome of them
in a ftill greater proportion than the demand.

Tue value of a free-ftone quarry, for example, will neceffarily
increafe with the increafing improvement and population of the
country round about it ; efpecially if it fhould be the only one in
the neighbourhood. But the value of a filver mine, even though
there fhould not be another within a thoufand miles of it, will not
neceffarily increafe with the improvement of the country in which
it is fituated, The market for the produce of a free-ftone quarry
can feldom extend more than a few miles round about it, and the
demand muft generally be in proportion to the improvement and
population of that fmall diftrict. But the market for the produce
of a filver mine may extend over the whole known world, Unlefs
the world in general, therefore, be advancing in improvement and
population, the demand for filver might not be at all increafed, by
the improvement even of a large country in the neighbourhood of
the mine. Even though the world in general were improving,
yet, if in the courfe of its improvement, new mines fhould be dif-
covered, much more fertile than: any which had been known before,
though the demand for: filver would: neceffarily increafe, yet the
fupply might increafe in fo much a. greater proportion, that the
real price of that metal might gradually fall ;. that is, any given
quantity, a pound weight of it, for example, might gradually

4 purchafe

res 6° 4 fs 2 Ulett

THE WEALTH OF NATIONS,

purchafe or command a fmaller and a fmaller quantity of labour,
or exchange for a fmuller and a fmaller quantity of corn, the prin-
cipal part of the fubfiftence of the labourer.

Tue great market for filver is the commercial and civilized part
of the world,

Ir by the general progrefs of improvement the demand of this
market fhould increafe, while at the fame time the fupply did not
increafe in the fame proportion, the value of filver would gradually
rife in proportion to that of corn. Any given quantity of filver
would. exchange for a greater and a greater quantity of corn; or,
in other words, the average money price of corn would gradually
become cheaper and cheaper.

Ir, on the contrary, the fupply by fome-accident fhould inc. ‘eafe:

for many years together in a greater’proportion than the demand,

that metal would gradually become cheaper and cheaper ; or, in:
. other words, the ayerage money price of corn would, in fpite of.

all improvements, gradually become dearer and dearer.

Bur if, on the other hand, the-fupply of that metal fhould in-

creafe nearly in the fame proportion as the demand, it. would:
continue to purchafe.or exchange for nearly. the fame quantity of.
corn, ‘and the average money, price of corn would, in. fpite. of all:

improvements,. continue very nearly. the fame,

Turse three fem to exhauft all the poffible combinations :of °

events which can happen in the progrefs of improvement and

during the courfe of the four- centuries. preceeding the-prefent, if |

we may judge by what’ has happened: both in France and Great
Britain, each.of.thofe:three. different. combinations feems to. haye .
taken :

221

CHAP.
XI.

222 THE NATURE AND CAUSES OF

BOOK taken place in the European market, and nearly in the fame order
i——~ _ too in which I have here fet them down.

Digrefion concerning the Variations in the Value of Silver during the
Courfe of the Four laft Centuries.

First PERIOD.

N 1350, and for fome time before, the average price of the

quarter of wheat in England feems not to have been eftimated
lower tlian four ounces of filver Tower-weight, equal to about
twenty fhillings of our prefent money. From this price it feems to
have fallen gradually to two ounces of filver, equal to about ten
fhillings of our prefent money, the price at which we find it efti-
mated in the beginning of the fixteenth century, and at which it
feems to have continued to be eftimated till about 1570.

In 1350, being the 25th of Edward TI, was enacted what is
called, The ftatute of labourers. In the preamble it complains
much of the infolence-of fervants, who endeavoured to raife their
wages ‘tipon their mafters. It therefore ordains, that all fervants
and labourers fhould for the future be contented with the fame
"wages and liveries (liveries 'in thofe times fignified, not only cloaths,
‘but provifions) which they had been ‘accuftomed ‘to receive in the
2oth year of the king, and the four preceeding vears. that :upon
this account their livery wheat fhould no where be eftimated higher
than ten-pence a bufhel, and that it fhould always be in the option
of the mafter to deliver them either the wheat or the money.
Ten-pence a bufhel, therefore, had in the 25th of Edward I,
.tpeen reckoned a very moierate price of wheat, ‘fince \it required a
"particular ftatute'to oblige fervants'to accept of it in exchange for
| 7 their

THE WEALTH OF NATIONS.

223

their ufual livery of provifions; and it had been reckoned a rea- © ah
fonable price ten years before that, or in the 16th year of the king, —~—~

the term to which the ftatute refers. But in the 16th year of
Edward III, ten-pence contained about half an ounce of filver
Tower-weight, and was nearly equal to half a crown of our prefent
money. Four ounces of filver, Tower-weight, therefore, equal
to fix fhillings and eight-pence of the money of thofe times, and
to near twenty fhillings of that of the prefent, muft have been
reckoned a moderate price for the quarter of eight bufhels.

Tus ftatute is furely a better evidence of what was reckoned in
thofe times a moderate price of grain, than the prices of fome par-
ticular years, which have generally been recorded by hiftorians

and other writers on account of their extraordinary dearnefs or

cheapnefs, and from which, ‘therefore, it is difficult to form any
judgement concerning what may have been the ordinary price.
There are, befides, other reafons for believing that in the begin-
ning of the fourteenth century, and for fome time before, the com-
mon price of wheat was not lefs than four ounces of filver the
quarter, and that of other grain in proportion.

In 1300, Ralph de Born, prior of St. Auguftine’s Canterbury,
gave a feaft upon his inftallation day, of which William Thorn
has-preferved,> not only the ‘bill of fare, but the prices of many
particulars. In that feaft were confumed, ift, fifty-three quarters
of wheat, which coft nineteen pounds, or feven fhillings and two-
pence a quarter, equal to about one and twenty fhillings and fix-
pence of our prefent money: adly, Fifty-eight quarters of malt,
which coft feventeen pounds ten fhillings, or fix fhillingsa quarter,

equal to about. cighteen :fhillings of our prefent money: 3dly,:

Twenty quarters of oats, which coft four pounds, or four fhillin7s
a quarter, equal to about twelve fhillings of .our. prefent money.

244 THE! NATURE) AND CAUSES OF

B o 4 K The prices! of malt and oats feem here to be higher than their ordi-
ened nary proportion to the price of wheat. ©

‘Tues? prices arenot recorded on account of their extraordinary

dearnefs or cheapnefs, but are mentioned accidentally as the prices t
actually paid for large quantities of grain confumed at a feaft which | PF
«was famous for its:magnificence. f
| f
In 1262, ‘being the srft of Henry III, was revived an ancient te
ftatute called, The Afize of Bread and Ale, which, the king fays tl
dn the preamble, had been made in the times of his progenitors fome-
time kings of England., It is probably, therefore, as old at leaft
‘as the time)of his grandfather Henry II, and may have been as b
old, as;the Conqueft.. , It regulates the price of bread according as w
the, prices of wheat, may happen to be, from one fhilling to twenty pe
Ahillings the quarter of the money of thofe times. But ftatutes of

this kind. are generally prefumed to provide with equal care for all
deviations from the middle price, for thofe below it as well as for
thofe above it. Ten fhillings, therefore, containing fix ounces of
filver Tower-weight, and equal to about thirty fhillings of our
prefent money, muft upon this fuppofition have been reckoned the
middle price of the quarter of wheat when ‘this ftatute was firft

y Ot obey

fit. “We cannot therefore be very far wrong in fuppofing that the
‘middle price was not lefs than one-third of the higheft price at
which this ftatute regulates the price of bread, or than fix fhillings
and cight-pence of the money of thofe times, containing four
ounces of filver Tower- patent.

Pech thefe A facts, therefore, we feem to have fome
‘reaton to conclude, that about the middle of the fourteenth: century,

and for a confiderable time before, the average or ordinary price
of

THE WEALTH OF NATIONS.

of the quarter of wheat was not fuppofed to be lefs than fous ounces
of filver Tower-weight. .

From about the middle of the fourteenth to the beginning of
the fixteenth century, what was reckoned the reafonable and mode-
rate, that is the ordinary or average price of wheat, feems to have
funk gradually to about one-half of this price; fo as at laft to have
fallen to about two ounces of filver Tower-weight, equal to about
ten thillings of our prefent money. It continued to be eftimated at
this price till about 1570.

In the houfhold book of Henry, the fifth Earl of Northum-
berland, drawn up in 1 $12, there are two different eftimations of
wheat. In one of them it is computed at fix fhillings and cight-
pence the quarter; in the other at five fhillings and eight-pence
only. In 1512, Gx thillings and eight-pence contained only two
ounces of filver ‘Sower-weight, and were equal to about ten fhil-
lings of our prefent money.

From the 2 5th of Edward III, to the beginning of the reign of
Elizabeth, during the fpace of more than two hundred years, fix
fhillings and eight-pence, it appears from feveral different ftatutes,
had continued to be confidered as what is called the moderate and
reafgnable, that is the ordinary or average price of wheat. The
quantity of filver, however, contained in that nominal fum was,
during the courfe of this period, continually dimini(hing, in cone
fequence of fome alterations which were made in the coin. But
the increafe ‘of the value of filver had, it feems, fo far compenfated
the diminution of the quantity of it contained in the fame nominal
fum, that the legiflature did not think it worth whils to. attend to
this circumftance,

Vou. I. Gg Tuus

226 THE’ NATURE’ AND CAUSES OF

BOOK ''Tivusin 1436 it was enacted, that wheat might be exported
ww without a licence when the price was fo low as fix fhillings and
cight-pence: And in 1463 it was enacted, that no wheat fhould
be imported if the price was not above fix fhillings and eight-pence
the quarter. The legiflature had imagined, that when the price
was fo low, there could be no inconveniency in exportation, but
that when it rofe higher, it’ became prudent to allow of impor-
tation... Six fhillings and eight-pence, therefore, containing about
the fame quantity of filver as thirteen fhillings and four-pence of
our prefent money, (one-third part lefs than the fame nominal fum
contained in the time of Edward III.), had in thofe times been con-
fidered as- what is called the moderate and reafonable price of
wheat.

“Int $54, by the 1ft and ad of Philip and Mary ; and in 1558,
by the ift of Elizabeth, the exportation of wheat was in the fame
manner prohibited, whenever the price of the quarter fhould exceed
fix fhillings and eight-pence, which did not thencontain two penny
worth more filver than the fame nominal fum does at prefent. But
it had foon been found that. to reftrain the exportation of wheat
till the price was fo very low, was, in reality, to prohibit it altoge-
ther. In 1 562, therefore, by the sth of Elizabeth, the exportation
of Wheat was allowed from certain ports whenever the price of the
quarter fhould not exceed ten fhillings, containing nearly the fame
quantity of filver as the like nominal fum does at prefent. This
price had at this time, therefore, been confidered as what is called
the moderate and reafonable price of wheat. It agrees nearly with
the eftimation of the sera ranelae book in 1512.

‘Tuat in France the average price of grain was, in the fame
manner, much lower in the end of the fifteenth and beginning of
tthe fixteenth century, than in the two centuries. preceeding, has
rt been

THE WEALTH. OF, NATIONS.
been obferved both by Mr. Dupré de: St, Maur, and. by the elegant

author of the Effay on the police of grain, Its price, during the jee

fame period, had probably funk in the fame manner through the
greater part of Europe.

Turs rife in the value of filver in proportion to that of corn,
may either have been owing altogether to the increafe of the demand
for that metal, in confequence of increafing improvement and cul+
tivation, the fupply in the mean, time. continuing the fame as
before: Or, the demand continuing the fame as before, it may
have been owing altogether to the gradual diminution of the fupply;
the greater part of the mines which were then known in the world,
being much exhaufted, and confequently the expence of working
them much increafed: Or it may have been owing partly to the
one and partly to the other of thofe two circumftances. In the end
of the fifteenth and beginning of the fixteenth centuries, the greater
part of Europe was approaching towards a more fettled form of go-
vernment than it had enjoyed for feveral ages before. The increafe of
fecurity would naturally increafe induftry and i improvement ; and the
demand for the precious metals, as well as for every other luxury
and ornament, would naturally increafe with the increafe of riches.
A greater annual produce would require a greater quantity of coin
tocirculate it ; and a greater number of rich people would require a
greater quantity of plate and other ornaments of filver, Itis natural
to fuppofe too, that the greater part of the mines which then fup-
plied the European market with filver, might be a good deal ex-
haufted, and have become more expenfive in the working, They
had been wrought many of them from the time of the Romans.

Ir has been the opinion, however, of the. greater part. of, thofe
who have written upon the prices of commodities..in,.antient
times, that, from the Conqueft, perhaps from. .the:, invafion,of
Gg2 Julius

228

THE NATURE AND CAUSES OF

BOOK Julius Ceefar till the difcovery of the mines of America, the value
wey~w of filver was eontitually diminifhing. This opinion they feem to

have been led into, partly by the obfervations which they had occafion
to make upon the prices both of corn and of fome other parts of
the rude produce of land; and partly by the popular notion, that
as the quantity of filver naturally increafes in ¢very country
with the increafe of wealth, fo its value diminifhes as its quantity
increafes. —

_ Iw their obfervations upon the prices of corn, three different cir-
cumftances feem frequently to have mifled them.

First, In antient times almoft all rents were paid in kind;
jn acertain quantity of corn, cattle, poultry, &c. It ‘fometimes
happened, however, that the landlord would ftipulate with the
tenant, ‘that ‘he fhould be at liberty to demand either the annual

- payment in kind, or a certain fum of money inftead of it. The

price at which the payment in kind was in this manner exchanged

for a certain fum of money, is in Scotland called the converfion

price. As the option is always in the landlord to take either the
fubftance or the price, it is neceffary for the fafety of the tenant,
‘that the converfion price fhould: rather be below than above the
average market price. In many places, accordingly, it is not much
above one-half of this price. Through the greater part of Scotland
‘this cuftom {till continues with regard to poultry, and in fome
places with regard to cattle. It might probably have continued
to take place too with regard to corn, had not the inftitution
of the publick fiars put an end to it. Thefe are annual valu-
ations, according to the judgement of an affize, of the average
price of all the different forts of grain, and. of all the dif-
ferent ‘qualities of ‘each, ‘according to the a€tual market ‘price
in every ‘different ‘county. "This inftitution rendered it fofficiently
fafe for the tenant, and-much ‘more convenient for the landlord,

THE WEALTH: OF) NATAONS:

220

to convert, as they call it, the cornarentat:the price of the fiarsiof © a P.
each year, rather than at any certain: fixed! price: But the: writers Gey

who have collected the prices of:\corn ii santient:times, feem-fre-
quently to have miftaken. what:is called:in Scotland the converfion
price for the aétual market price.; |Rleetwood acknowledges upon
one occafion that he had made:this miftake. |} As he.wrote his: book,
however, for a particulas, ipurpofe, hedoes not. think ‘proper
to make this acknowledgement till after.tranfcribing this converfion —
price fifteen times. The price is eight fhillings the quarter. of
wheat, This fum in 1423, the year at Which ‘he ‘begins with it,
contained the fame quantity of filver a9 fixteen Milllhgs of Our pre-
fent money. But in 1562, the year at which he ends,with it, itcon-
tained no more than the fame narnia {pm: et at, oifuiilia
+ tart srovaworl . benvqq
SrconpLy, They have ‘hem waitled by the. flovenly manner, in
which fome antient ftatutes of affize had been fometimes, tranfcribed
by lazy copiers; and fometimes perhaps uss asa by: mt
legiflature. | ue

Tue antient ftatutes of affize feem to have perp git! with, de-
termining what ought to be the price of bread and.ale when the price of
wheat and barley were at the loweft, and to have ‘proceeded gradually
to determine what it ought.to be according as the prices, of thofe
two forts of grain fhould, gradually rife above this, lowelt price,
But the tranicribers of thofe ftatutes teem frequently to have though, '
it fufficient to copy the regulation as far as the three or four firft
and loweft prices; faving in this manner their own ,labour,:and

judging, I fuppofe, that this was enough to Show. what —
ought to be obferved in all higher prices.

Tuus in the affize of ‘bread and ale, of the, jaf afiiBenep Be
the price of bread was #egulated .according tothe different pricetof
7 wheat,

THE NATURE AND CAUSES OF

BOOK wheat, from one fhilling to twenty fhillings the quarter, of the
t——wy ‘money of thofe times. But in the manufcripts from which all the

different editions of the ftatutes, preceeding that of Mr. Ruffhead,
cwere printed, the copiers had never tranfcribed this regulation be-
ryond the price of twelve fhillings. Several writers, therefore, being
amifled by this faulty tranfcription, very naturally concluded that the
‘middle price, or fix fhillings the quarter, equal to about eighteen
fhillings of our prefent money, was the ordinary or average price of
‘wheat at that time,

In the ftatute of Tumbrel and Pillory, enacted nearly about the
fame time, the price of ale is regulated according to every fixpence
rife in the price of barley, from two fhillings to four fhillings the
quarter. That four fhillings, however, was not confidered as the
-higheft price to which barley might frequently rife in thofe times,
-and that thefe prices were only given as an example of the proportion
which ought to be obferved in all other prices, whether higher or
lower, we may infer from the laft words of the ftatute; ‘* et fic
<* deinceps crefcetur vel diminuetur per fex denarios.” The cx-
preffion is very flovenly, but the meaning is plain enough;
«« That the price of ale is in this manner to be increafed or di-
¢ minifhed according to every fixpence -rife or fall in the price of
** barley.” In the compofition of this ftatute the legiflature itfelf
feems to have been as negligent as the copiers were in the tran{cription
of the other.

In an antient manufcript of the Regiam Majeftatem, an old
Scotch law book, there is a ftatute of affize, in which the price of
bread is regulated according to all the different prices of wheat, from
ten-pence to three fhillings the Scotch boll, equal to about half an
Englith quarter, Three fhillings Scotch, at the time when this
affize is fuppofed to have been enacted, were equal to about nine
fhillings

THE WEALTH OF NATIONS.

fhillings fterling of our prefent money. Mr. Rudiman feems to:
conclude from this, that three fhillings was the higheft price to.
which wheat ever rofe in thofe times, and that ten-pence, a fhilling,

or at moft two fhillings, were the ordinary prices, Upon con-.
fulting the manufcript, however, it appears evidently, that all thefe.

prices are only fet down as examples of the proportion which ought
to be obferved between the refpective prices of wheat and bread.

The laft words of the ftatute are, ‘* reliqua judicabis fecundum.

«¢ prefcripta habendo refpectum ad pretium bladi.” « You thall

** judge of the remaining cafes according to what is above written, ,

¢* having a refpect to the price of corn.”

Turrpry, They feem to have been mifled too by the very low
price-at which wheat was fometimes: fold in very antient tiries;
and to have imagined, that as its loweft price was then n ch
lower than in later times, its ordinary price muft likewife hz ¢
been much lower. ~ ‘They:might have found, however, that in thofe

antient times, its higheft price was fully as much above, as its.

loweft price was below any thing that had ever been known in later

times. Thus in.1270, Fleetwood gives us two prices of the quarter -

of wheat. The-one is‘ four.pounds fixteen fhillings of the money
of thofe times, equal to fourteen pounds eight fhillings of that of the
prefent ; the other is fix pounds eight fhillings; equal to nineteen

pounds four fhillings of our prefent money. No price can be found .
in‘the end of ‘the fifteenth, or beginning of the fixteenth century, |
which approaches to the extravagance of thefe.. The price-of corn, ,
though at all times liable to variations, varies: moft in thofe ture -
bulent and. diforderly: focieties, in which the: interrupiion of.all .

commerce and communication hinders the plenty of one part of. the
country from relieving the -fearcity.of another. In the diforderly
{tate of England: under the Plantagenets, who governed. it. from
about the middle of the twelfth, till towards the.end of the fifteenth

century, ,

231
as al
aleiea,

232

THE NaTURE AND 'CAUSES' ‘OF

B a0 K. cehtury, dite aiftmer ‘might be'in plenty, while another at no Btéat
wes diftance, by having its crop deltroyed either by feme ‘accWent of ‘the

feafons, or by the inturfion of fome re baron, might be
f “eying all the horrors of a famine} and yet if''the lands of ‘foitie
aoftile lord ‘were interpofed ‘between them,’ the one’ might net' be
able to give the leatt affitance to the other. Under the vigétous ad-
miniftration of the Tudors, who governed England during the latter
part of the fifteenth, and through the whole of the fixteenth century,
no baron was po ‘erful enough to dare to wittar the publick
{ecurity.

Tue reader will find at the end of this chapter all the prices of —

wheat which have been collected by Fleetwood from':1202 to 4/597,
both inclufive,’ reduced to’ the money of the prefént ‘times, and
digefted according to the order of time, into feven ‘divifion$ of
twelve years each. At the end of each divifion too, he’ wilk’find
the average price of the twelve years of which it confifts; In that
long petiod of time, ‘Fleetwood has been ‘able to ‘collect the prices

of no more than eighty years, fo that four’ years'are Wanting ‘to -

make out the laft twelve years. I have added, thesfore,’ fromthe
accounts of Eton college, the prices of 1598, 15993! 1600, and
360%. It isthe only addition which I have made. The reader
will fee that fram the beginning of the thirteenth till after the
middle af the fixteenth contury, the average price of each twelve
years grows gradually lower and lower; amd that towards: the
ead of the fixteenth century. it begins to rife again. The prices,
indeed, which Fleetwood has been able to colleét, feerm to have
been thofe chiefly which were remaskable for extraordinary dear-
nefs or cheapnefs; and I do not pretend that any very certain ‘con-
clufion can be drawn from them. So fax, however, as they prove
any thing at all, they confirm the account which’ I have been en-
deavouring to give. Fleetwood himéelf, however, feems, with
meft other writers, to have believed, that during all this period the
value

THE WEALTH CF NATIONS,

value of filver, in confequence. of its increafing abundance, wag, CHA P.
continually diminifhing. ' The prices of corn which he himfelf has G-+——

collected, certainly do.not agree with this opinion. They agree
perfeétly with that of Mr. Dupré de St. Maur, and with that
which I have been endeavouring to explain. Bifhop Fleetwood
and Mr. Dupré de St. Maur. are‘ the.two authors who fee
to have colleéted, with the greateft diligence and fidelity, «ie,
prices of things in antient times. It is fomewhat curious that,
though their opinions are fo very different, their facts, fo far
as they relate to the price of corn at leaft, fhould coincide fo very
exactly,

Ir isnot, however, fo much from the low price of corn, as from
that of fome other parts of the rude produce of land, that the moft
judicious writers have inferred the great value of filver in thofe very
antient times. Corn, it has been faid, being a fort of manufacture,
was, in thofe rude ages, much dearer in proportion than the greater
part of other commodities ; .it is meant, I fuppofe, than the greater
part of unmanufactured commodities, fuch as cattle, poultry, game
of all kinds, &c. That in th-fe tinies of poverty and barbarifm
thefe were proportionably much cheaper than corn, is undoubtedly
true. But this cheapnefs was not the effect of the high value of
filver, but of the low value of thofe commodities. It was not that
filver would in fuch times purchaie or reprefent a greater quantity of
labour, but that fuch commodities would purchafe or reprefent a
much fmaller quantity than in times of more cpulence and im-
provement. Silver muft certainly be cheaper in Spanifh America
than in Europe; in the country where it is produced, than in the
country to which it is brought, at the expence of a long carriage
both by land and by fea, of a freight and an infurance. One and
twenty pence halfpenny fterling, however, we are told by Ulloa,
was, not many years ago, at Buenos Ayres, the price of an ox
- Vou. I. ES, chofen

234

THE NATURE AND ‘CAUSES ‘OF

BOOK chofen ‘from @ herd of elites ‘or ‘four ‘hundred. ‘Sineetn Thittirigs
wayne feiling, we dre toll’ by Mr. Byron, ‘Was the ‘price of a Bod horke

in the ‘capital of ‘Chili, In a‘ country nattirally fertile, but of
whith ‘the far greater part is altogether uinchltivated, ‘cattle; poul<
try pame ‘of ‘all kinds, ‘écc. ‘as’ ‘they ‘can ‘be ‘Acquired’ with»
ve; itl quantity of labour,’ fo vhey ‘will puirchafe or ‘corhmend
bat a very fmdll quantity. ‘The low rhoney price ‘for which they
may ‘be fold, i8 ‘no prodf that. the ‘real ‘walae 6f filver is.
there vey ‘high, ‘but! that ‘the real veilae of bs popinanneasa is
very low. 2,
Lasour, it muft always be remembered, and not any particular
comic uity or ‘fett-of comimodities, is the teal meafute of the value
both of filver and df all-other commodities. BO131NOKt

‘Bur ‘in Countries alitio&t wafte, or bit'thinly inhabited, ‘cattle,
poultry, game ‘df all kinds, ‘Sec. as thtyare the’ fpontaieotis fffo-

duétions of nature, fo the frequently produces thein'in much Breater
quantities ‘than ‘the ‘cohfumption ‘Gf “the “inhabitants “reeplires.
In fuch a ‘{tate'of ‘things ‘the fopply comfnonily exceeds the'demand,
In different ‘ftates of fociety, in different ftages of improvement,
therefore, ‘fuch ‘commodities will repréfent, ‘or be equivalent to, very
different iaganaee Of labour.

Invevery ftate of fociety, in every ftage of improvement, ‘orn is
the produétion ‘of human induftry. But the average produce of
every fort of ‘induftry is always ‘fuited, more or lefs exactly, to”
the average confumption ; ‘the average fupply to. the average denmvand.
Tn every differéntftage of improvement befides, the raifing of equal
quantities of corn in the fame foil and climate, will, at an average,
require tiearly ‘equal quantities of labour; ‘or what comes to the
fame thing, the price of nearly ‘equal quantities; the continual in-

creafe

as = & sh OO WS

THE WEALTH, OF NATIONS

creale,of the productive, paweis, of labour in. an, improving, fate, of CHAP.
cultivation. . being, more of lefs counter-balanced, by, the, continyally ——y

increafing,price of cattle, the principal, in@ruments of agriculgure.

' Upon all thle accounts, thereto, we may ret aflured, that, equal

quantities, of corn will, in every ftate of fociety, in every ftage cf
improvement, mors. nearly reprefent, or be equivalent to, equal
quantities of Igbour, than equal, quantities of any, other part of the
rude, produce of Jand.. Cogn, accordingly, it has already been ob-
ferved,:.is,,in.cllthe different tapes of wealth and impravement, a
more accurate meafure of value than any other commodity or {ett
of commodities. In all thofe different tages, therefore, we can
judge better, of the real value of filver, by comparing it w _corn,
than by comparing, it with any other commodity, or fett of com-
modities. 2 Leo thera !

Corny. befides, 4 whatever elfe is he common and favoyrite

vegetable food, of the, people, conftinutes,, in eyery civilized conntry,
the principal part , of the fubfftence. of the. labourer. In conig-

quence of the extention « of agriculture, the land: of every ‘country
produces a much greater quantity of vegetable than of animal food,
and the labourer every where lives chiefly upon the wholefome
food that, is . heapeft an nd d moft abundant, . ‘Butcher’s-meat, except
in the moft iving countries, or where labour, is moft. highly
rewarded, makes but an infignificant pact of his fabliftence :

poultry makes a ftill fmaller pat of it, and game no part of it.
In France, and even ia Scotland, where labour is fome@what

‘better rewara.d than i in France, the labouring poor fldom eat

butcher’ $.- meat, except upon | holidays, and other extragrdi-
nary ogcafions, The money price of Jabour, therefore, de-
pends much more upon the average money price of corn, the
fubfiftence of the labeurey, than upon that of buteher’s-meat, or
of any other part of the rydepyoduce of land. ‘The seal value of

Hh,2 gold

236

THE) NATURE: AND 'CAUSES ‘iOF

BOOK gold-and filwér, therefore, the:real quantity:of labour:which'they can
tev, piirchafe-or command, depends much: more upon'the quantity of

corn) which they'can‘purchafe ‘or command, than ‘upon: that .
ers §-meat,:/0r i sapiens Liery " the rude par of land, ‘|

in reeTerec ny |

shiek flight elifevationi, howendh; tipo et prices either'of corm or
of. other commodities, would not probably have mifled fo many
intelligent authors, had. th-y not been agreeable to the’ popular
notion;‘ that as the quantity of! filver naturally’ incréafes “in ‘every
country: with the increafe of wealth, fo its value diminifhes as

its quantity increafes.. This notion, however, feems to bealtogether
i ‘

Tus, quantity of therg cic metals may tnaredain any country
from: two: different caufes :. either; firft, from the increafed: abun-
dance of the mines which fupply it; or, fecondly, ‘from the increafed
wealth of: the:people, from ‘the increafed produce of their annual
labour:> | The firft-of thefe|caufes is no doubt neceffarily connected

with the diminution of: the'value of the precious metals ; but the.
fecond is not.

Wuen more abundant mines are difcovered, a greater quantity
of the precious metals is brought to market, and the quantity of.
the neceflaries and conveniencies: of lifé for which’ they muft be.
exchanged being the fame as before, equal quantities of the metals.
mutt be exchanged for fmaller quantities of commodities. So far,
therefore, as the increafé of the quantity of the precious metals in.
any country arifes from the increafed abundance of. the mines,
it is neceflarily connected with fome-diminution of their, value, .

Wuen; on: the cnbiiaeys ‘the wealth of any country increafes,
when the annual produce-of its labour becomes gradually greater

4: and;

THE! WEALTH? OF’ NATIONS.

237

and greater, ‘a-greater quantity of icoim becomes neceflary inorder CHA P.
to scireulate a greater quantity ‘of commodities; ‘and the people, ne 2a

as they caniaffordit, as:they have more commodities to give for it,
will naturally purchafe a greater) and: a’ greater quantity of plate.
The quantity of their coin will increafe from neceffity; the quantity
of their plate from :vanity and oftentation,’ or from the fame reafon
thatthe quantity. of fine ftatues; pictures, and of every. other
luxury:and:curiofity, is likely: to) encreafe among ‘them: But as
ftatuaries and) painters: are:not likely: to :be warfe‘rewarded in'times

of wealth and. profperity, thamlin:times of poverty and: depreffion;,

fo gold and filver: are not: likely. tobe worfe\paid for, 1"

Tue price of gold and filver, when the accidental difcovery of
morecabundant:mines: does: not ‘keep it: down,’ as it’ naturally rifes
with the: wealth of every country, ‘fo, whatever: be’ the: ftate of
the. mines, ‘itvis/tatyiall times«naturally.-higher inva‘rich’ than:in a
poor: countrys »Goldvand' filver, : like all: other commodities,’ na+

turally feek ithe market where the beft price is given for'them, and.

the heft price is commonly given ‘for every thing in the country
which. can beft afford it. Labour, it muft be remembered, is

the ultimate price which is paid for every thing, and in countries.

where labour, is. equally well rewarded, the money price of labour
will; bein proportion to that, of the fubfiftence of the: labourer.
But gold.and filver will naturally exchange for a greater quantity of

fubfiftence in a rich than in a poor country, in a country which,

abounds with fubfiftence, than in one which is but indifferently fup-
plied with it. If the two countries are at a great diftance, the dif-
ference may be very great; becaufe though the metals naturally
fly from. the worfe to the better market, yet it may be difficult to
tranfport them in fuch quantities as to bring their price nearly: to

a:level:.in: both. . If. the countries:are. near, the. difference will be -

fmaller,, and may, fometimes be fearce: perceptible; becaufe in this

cafe 3

238

THE NATURE AND CAUSES OF

BOOK ale the tranfportation’will be eafp. ‘China’is ‘a miuch sicher coun.
wen try than any part of Europe, and the difference between the price of

fubfiftence in China and in Europe is very great; Rice in China
is much chéaper' than wheat is any where in’ Burope,’ “England
is'a much ‘richer country than ‘Scotlatid; ‘but the difference between
the money price of corn’ in thof'two countries is much’ fmaller,
and is but juft perceptible. In proportion ‘to the quantity ot
meafute, Scotch corn’ generally appears ta be a good deal \cheaper
than Englith; but in proportion to its quality, it is.certainly fome-
what dearer. Scotland receives almoft every year very large fup-
plies from England, and every commodity muft commonly’ be
fomewhat dearer in the country to which it is brought than in
that from which:it comes. Englith corn, therefore, muft be dearer
in | S¢othanc ‘than in’ England, ‘and yet in proportion ‘te ‘its quality,
or ‘to ‘the quantity amd goodhels of ' the flour ‘or ‘meal’ whitcl'can
be made from: it, »it cannot: commonly be fold ‘higher there’ the a
nee Seotch corn which comes to ray seta in arcs ogg was it.

Tue difference between the money, price of labour i in ‘China and
in Europe,, is ftill greater than that between the money price of
fubfiftence; becaufe the real recompence of labour is higher in
Europe than in China, the greater part af Europe being in an
improving ftate, while China feems to be ftanding ftill, The mo-
ney price of labour is lower in, Scotland than in England, , becaufe
the real recompence of labour is much lower; Scotland, though
advancing to greater wealth, advancing much more flowly than
England, The proportion between the real recorpence of labour
in different countries, it, muft be remembered, is naturally regu-
lated, not by their aétual wealth or poverty, but by their advanc-
ing, {tationary, or declining condition.

Goxp and filver, as.they are naturally of the greateft value among
the richeft, ‘fo they are naturally of leaft value among the pooreft
7 nations.

nA
fc

THE WEALTH, OF, NATIONS,

nations, Among favage, the mere oF all naan they are.of
fcarce any value... ,

In great towns cern. is always deauer, than in_ remote parts of
the country... ‘This, howeves,,i8 the effect, not of the real cheap-
nefs of filver, but of, the real idearnefs,of corn. It does nat:coft
lefs labour to bring filver to the great town than to the remote

parts of the .country; but it. cofts ia orn deal. more to vt
corn, ,) }

In fome. ‘very, sich and; waiavneiaiel countries, fac. Ag tole
Jand and the,territory of Genoa, corn. is dear for the:fame xeafon
that jt is dear in great towns. ‘They: donot, produce,;enough, to
maintain ¢heininhabitants, They. exexichin the induftryand fill of
their artificers and, manaifachurers 5; inveveryfort of machineny which
can facilitate and abridge .labour; -in-fhipping, and insall the other
inftruments and means of :carriage and commerce: ‘but thoy are
poor in cosn, which, -as-it-muft -be ‘brought 'to them ‘from:diftant
countries,’ muft, by an addition ‘to its price, pay for the carriage
from thofe countries.' It does not coft’ lefs labour to bring filver to
Amfterdam than to Dantzick;-but it cofts a great deal more to
bring ‘corn. ‘The real coft of ‘filver muft be nearly the fame in
both places; but that of corn muft be very.different. « Diminifh
the real opulence either of\Holland or of the territory.of Genoa,
while the number of their inhabitants remains.the fame ;.:diminifh
their power of fupplying themfelves from diftant countries; and
the price of corn, inftead of finking with that diminution in the
quantity of their filver, which ,muft neceffarily accompany this de-
clenfion cither .as,its caufe or,as its effect, ‘will rife to. the price of
4 famine. When we are.in.want ofineeeflaries we imuft-part-with
all fuperfluities, .of which the value, as it.rifes.in times of opulence

-and profperity,. fo, it :finks .in times,of poverty and idiftrefs, tis

otherwife

239
CH, Ar.
Ae

440 THE NATURE AND CAUSES OF

agoK -otherwife with ‘neceflaries. Their real price, the quantity of of
‘tye labour which they can purchafe or command, ‘rifes: in’ times of or
poverty and diftrefs, and finks in times of opulence and prof- fix
‘perity, which are always times of ‘great abundances for they fhi
could not otherwife be times of opulence and profperity. Corn
isa neceflary, filver:is only @ fuperfluity. '
bee
> Wuarever, therefore, may have been the increafe in the quan- po
tity of the precious metals, which, during the period between the fan
middle of the fourteenth and that of the fixteenth century, eitl
-arofe from the increafe of ‘wealth and improvement, it could have Eu
no tendency: to diminith their value either in Great -Britain, or pre
in any other part, of Europe. If thofe who have collected ‘the inc
prices of things in ancient:times, therefore, had, during this pe- exc
riod, no reafon to: infer the diminution of the value of filver, from con
any obfervations which they had made upon the prices either of be
corn or of other commodities, they had ftill lefs reafon to infer it upe

from any fuppofed increafe of wealth and improvement,

SECOND PERIOD,

BY T how various. foever may have been the opinions of the

learned concerning the progrefs of the value of filver during
this firft period, they are unanimous concerning it during the
fecond.

‘From about 1570 to about 1640, during a period of about fe-
»wenty years, the variation in’ the ‘proportion between the value of
filver and that of corn, held a quite oppofite courfe. Silver funk
in its real value, or would exchange for a finaller quantity of 1a-
bour than. before; and corn rofe in its nominal price, and inftead
of

THE WEALTH OF NATIONS,

341

of being:commonly fold (0; about two ounces of filver the quarter, CHAT.
or about ten fhillings of our prefent money, came to be fold for —+y—~

fix and eight ounces of filver the quarter, or about thirty and forty
fhillings of our prefent money.

Tur difcovery of the abundant mines of America, feems to have.
been the fole caufe of this diminution in the valuc .f filver in pro-
portion to that of corn, It is accounted for acco dingly in the
fame manner by every body; and there never has been any difpute
either about the fact, or about tlic caufe of it. The greater part of
Europe was, during this period, advancing in induftry and im-
provement, and the demand for filver inuft confequently have been
increafing. . But the increafe of the fuzply had, it feems, fo far
exceeded that of the demand, that the value of i/at metal fink
confiderably. The difcovery of the mines of America, it is to
be obferved, docs not feem to have had any very feniible effect
upon the prices of things in England till after 1579; though
even the mines of Potofi had been difcovered more than thirty
years before.

From 1595 to 1620, both inclufive, the average price of the
quarter of nine bufhels of the beft wheat at Windfor market, ap-
pears, from the accounts of Eton College, to have been 2l. 15.
6d. ,%,.. From which fum, neglecting the fraction, and deducting
a ninth, or 48. 7d. 4, the price of the quarter of eight buthels
comes out to have been : i. 168. sod. 3. And from this fum,
neglecting likewife the fraction, and deducting a ninth, or 4s. 1d.5,
for-the difference between. the price of the beft wheat, and that of
the middle wheat, the price of the middle wheat comes out to
have been about 11. 128. 8d, 4, or about fix ounces and one-
third of an ounce of filver.

Vou. I. li FRoM

240.
BOOK

THE NATURE AND CAUSES OF
From 1621 to 1636, both inclufive, the average price of the

iyeotaes fame meafure of the beft wheat at the fame market, appears, from

the fame accounts, to have been 21. 108.3; from which making
the like deductions as in the foregoing cafe, the average price of
the quarter of eight bufhels of middle wheat comes out to have

‘been 11. 198. 6d. or about feven ounces and twosthirds of an

ounce of filver.

THIRD PER TOD,

ETWEEN 1630 and 1640, or about 1636, the effect of the
difcovery of the mines of America in reducing the value of filver,
appears to have been compleated, and the value of that metal feems.
never to have funk lower in proportion. to that of corn than it
was about that time. It feems to have rifen fomewhat in the
courfe of the prefent century, and it had probably begun to do fo,
even fome time before the end of the laft..

From 1637 to 1700, both inclufive, being the fixty-four laft
years of the laft century, the average price of the quarter of nine-
bufhels of the beft wheat ‘at Windfor market; appears, from the.
fame accounts; to have keen 21. rrs. od. +3 which is‘only 1s. od. £
dearer than it had. been during the fixteen years before.. But in
the courfe of’ trefe fixty-four- years there happened two events,
which muft have produced’ a much greater fearcity:oF com than:
what the courfe of: the feafons would otherwife have occafioned;.
and which, therefore,’ without’ fuppofing any further reduction:
in the’ value of filver, will’: much more than account: for this very.
fmall enhancement of pris:

Tue firft of thefe events was 9 the civil war, wiih by diveournge
ing tillace-and interrupting commerce, muft have raifed the. price:
, 4, of

@ §

Fe DG

THE WEALTH OF NATIONS.

of corn much above what the courfe of the feafons would otherwife C BAP.
have occafioned. It muft have had this effect more or lefs at all —“—~

the different markets in the kingdom, but particularly at thofe in
the neighbourhood of London, which require to be fupplied from
the greateft diftance.’ In 1648, accordingly, the price of the
beft wheat at Windfor matket, appears, from the fame accounts,
to have been 41. 5s. and in 1649 to have been 41. the quarter of
nine bufhels. The excefs of thofe two years above 21. ros. (the
average price of the fixteen years preceding 1637) is 3.1. 5s.; which
divided among the fixty-four laft years of the laft century, will
alone very nearly account for that fmall enhancement of price
which feems to have taken place in them. ‘Thefe, however, though
the higheft, are by no means the only high prices which feem to

have been occafioned by the civil wars.

Tne fecond event was the bounty upon the exportation of corn
granted in 1688. The bounty, it has been thought by many
people, by encouraging tillage, may, in a long courfe of years,
have occafioned a greater abundance, and confequently a greater
cheapnefs of corn in the home-market than what would otherwife
have taken place there. But between 1688.and 1700, it had no
time to produce this effect, During this fhort period its only ef+
fect muft have been, by encouraging: the exportation of the furplus
produce of every year, and thereby hindering the abundance of
one year from compenfating the fcarcity of another,. to raife the
price in the home-market, The fcarcity which prevailed in Eng-
land from 1693 to 16y9, both inclufive, though no doubt prin-
cipally owing to the badnefs of the feafons, and, therefore, extend-
ing. through ‘a confiderable part of Europe, muft have been fome-
what enhanced by the bounty. In 1699, accordingly, the further
exportation of corn was prohibited for nine months,

li 2 THERE

244 THE NATURE AND CAUSES OF

BOOK THERE was a third event which. occurred in the courfe of the filver
t—--—~ fame period, and which, though it could not occafion any fearcity pofed.
of corn, nor, perhaps, any augmentation in the real quantity of In 16
filver which was ufually paid for it, muft. neceffarily have occas five a
fioned fome augmentation in the naminal fum. This event was ginnin
the great degradation of the filver coin, by clipping and wearing, great 1
This evil had begun in the reign of Charles II. and had gone on curren
continually increafing till 1695; at, which time, as we may learn weight
from Mr. Lowndes, the current filver coin was at an average, near centur
five and twenty per cent. below its ftandard value. . But the nomi- the ci
nal fum which conftitutes the market price of every commodity is the in
neceflarily regulated, not fo much by the quantity of filver, which, which
according to the ftandard, ought to be contained in it, as by that mutt
which, it is found by experience, a€tually is contained in it.., This otherv
nominal fum, therefore, is neceflarily higher when the coin. is the’ ex
much degraded by clipping and wearing, than when near to. its produc
ftandard value. courag
ms the ho
In the courfe of the prefent century, the filver coin has not ‘at lower
any time been more below its ftandard weight than it is at prefent, raife i
But though very much defaced, its value has been kept up by that more
of the gold coin for which it is exchanged. For though before the four
late re-coinage, the gold coin was a good deal defaced too, it was HOF, d
lefs fo than the filver. In 1695, on the contrary, the value of amare
the filver coin was not kept up by the gold coin; a guinea then ah:o9
commonly exchanging for thirty fhillings of the worn and clipt a ,

filver. Before the late re-coinage of the gold, the price of filver
bullion was feldom higher than five fhillings and feven-pence an
ounce, which is but five-pence above the mint price. But in 1696,
the common price of filver bullion was fix fhillings and five-pence
#” an ounce, which is fifteen-pence above the mint price. Even be-
iE fore the late re-coinage of the gold, therefore, the coin, gold and
filver

nine
teen ye
of An
about
years
to ha

THE WEALTH OF NATIONS,

filver together, when compared with filver bullion, was: not fup-
pofed.to be more than ‘eight per cent. below its ftandard value,
In 1695, on the contrary, it: had been . fuppofed to be near
five and twenty per cent. below that value. But in the be-
ginning of the prefent' ‘century, that is immediately after the
great re-coinage in’ King William's: time, the greater part of the.
current filver: coin. muft have° been ftill nearer to its ftandard
weight than it is at prefent In. the courfe of the prefent
century too there has been no-great publick calamity, fuch as
the civil war, which could ¢ither: difcourage tillage: or interrupt
the interior commerce -of'the ‘country: :And though the bounty,
which has taken place through the greater part of this century,
muft always raife the price of corn fomewhat higher than it
otherwife would:-be'in the--aétual. ftate, of tillage ; yet, as: in
the’ courfe of this:'century' the ‘bounty shas had full time to
produce ‘all the «good: effeéts commonly. imputed to -it,; to en-
courage tillage, and thereby to increafe the quantity of .corn in
the home market, it may be: fuppofed to have done fomething to
lower the price of, that commodity. the one way, as well as to
raife it the other... It.is by, many, people fuppofed to have done
more; a notion which I {hall examine hereafter. In the fixty-
four firft years..of the prefent century: accordingly, the average

price of the quarter of nine buthels of the beft wheat at Windfor

market, Appear by the accounts of Eton College, to have been
21, os. 6.23, which is about ten fhillings and fixpence, or
more than five and twenty per cent. cheaper than it had been
during the fixty-four laft years of the laft century; and about
nine fhillings and fix-pence cheaper than it had been during the fix-

teen years preceeding 1636, when the difcovery of the abundant mines.

of America may. be fuppofed tc have produced its full effect; and
about one shilling cheaper than it had been in the twenty-fix
years preceeding 1620, before that difcovery can well be fuppofed
to have produced its full effect. “According to this account, the
average

245

CHAP.

at ee ee a ee z

. rm PED bins Se GT eee 3 e . s pico ee awit ai Se ane

= ——— Si eerie enero een mana ean eaten Ie = asa =
_ bs he : :

THE NATURE AND CAUSES OF

BOOK average sprice of midille wheat, during thele finty-four firt yeary
ee of the prefent ‘century, comes out to have been about : 8

Shillings the quarter of eight ‘buthels.

‘Tue valuc of filver, therefore, feems to have rifen fomewhat
in proportion to that of corn'during the cuurfe of the prefent
century, an it had probably begun to do. fo even fome time
before the end of the laft.

In 1687, the price of the quarter of nine’ buthels. of the be
wheat at Windfor markct was ol. 5s. 2d. the loweft prise at
which it had ever been from 1595.

In 1688, Mr. Gregory King, a’ man famous for his’ know-
ledge in matters of this kind, eftimated the average price. of
wheat in years of moderat: plenty to be to the grower 3s. 6d.
the bufhel, or eight and twenty fhillings the quarter, The grow-
er’s price I underftand ‘to be the fame with what is fometimes called
the: contract: price, or the price at which a farmer contracts for
a‘cettain number of years to deliver a certain quantity of corn to
adealer. As a contraét of this kind faves the farmer the ex-
pence and trouble of marketing, ihe contract price is generally
lower than what is fuppofed to be the average market. price,
Mr. King had judged eight and twenty fhillings the quarter to
be at that time the ordinary contraét price in ‘years of moderate
plenty. Before the fcarcity occafioned by the late extraordinary
courfe of bad feafons, it was the ordinary contraét price in all
common years.

In 1688 was granted the parliamentary bounty upon the ex-
portation of corn. The country gentlemen, who then compofed a
till greater proportion of the legiflature than they do at prefent,
had

THE WEALTH OF NATIONS.

247

had: felt that the money price of torn was falling. The bounty CHAP.
was an expedient to raife it artificially to the high price at which -+y——

it had frequently been fold in the times of Charles I. and Il. It
was to take place, therefore, till wheat was fo high as forty-eight:
fhillings the quarter; that is twenty fhillings, or sths dearer
than Mr. King had in that very year-eftimated the grower’s price
to be in times of moderate plenty.. If his calculations deferve any.
part of the: reputation which they have obtained very univerfally,.
eight and: forty fhillings the. quarter was a price which, without
fome fuch expedient asthe bounty, could not at that time be
expected,. except in years. of extraordinary fearcity. wut the
government of king William v-as not then fully fettled. It was:
in. no. condition to refufe any thing. to the country gentlemen,,
from: whom: it was at: that: very time foliciting the firlt eftablith--
ment of. the annualland-tax. !

Tue value of filver, therefore; in: proportion. to: that of corn;.
liad. probably rifen fomewhat before the end of the laft century;
and it feems- to have continued'to do ic during the courfe of the:
greater part of the prefent; though the neceflary operation of:
the bounty muft have: hindered that rife from being fo fenfible:
as it otherwife would have been in the actual ftate of tillage.

In plentiful years the bounty, by occafioning an extraordinary:
exportation; neceffarily raifes the price of corn above what it:
otherwift: would be in thofe years. ‘To encourage tillage, by keepe-
ing up the price of corn even in the moft plentiful years,. was the:
avowed end of the inftitution.

_ In years of great fcareity,. indeed, the bounty has generally:

been fufpended. It muft, however, hwe had fome effect even:
upon the prices of many of thofe years.. By the: extraordinary
exportatiom

THE NATURE AND CAUSES OF

BOOK exportation which it occafions in years of “plenty, it: mutt fre-
i-—~ quently hinder the plenty of one year from compenfating the
{carcity of another.

Bot in years of plenty and in’ years of fearcity, therefore, the
bounty raifes the price of corn above what it nacuraily would be
in the actual ftate of tillage. If during te fixty-four firft years
of ‘the prefent ‘ceritury, therefore, ‘the average: price has been
lower than during the fixty-four' laft years of the laft ceutury, it
muft, ‘in the fame ftate ‘of tillage, have been -much more fo, had
it not been for this operation of ‘the bounty,

'
(
‘
1
{
1
I

Bur without the bounty, it may be faid, the. ftate of tillage
would not have-been the fame... What) may: have been: the effects
of thiz inftitution upon the. agriculture of, the country, J hall
endeavour to explain hereafter, when I come to treat particularly
of .bounties, . I. fhall only obferve: at prefent, that this rife in the
value..of. filver,;.in » proportion .to,.that of corn, , has not been
peculiar. to. England,...It has. been, obferved. to haye. taken . place
in France during the: fame period, and nearly in the fame pro-
portion too, by three very faithful, diligent, and laborious col-
le&tors of the prices of corn, Mr. Dupré de St. Maur, Mr.
Meffance, and the author of the Effay on the police of grain.
But in France, till 1764, the exportation of grain was by law
prohibited ; and it is fomewhat difficult to fuppofe that nearly the
fame diminution of price which took place in one country, not-
withftanding this prohibition, fhould i in another be owing to the
extraordinary encouragement given to exportation, ,

{r wouid be more proper perhaps to confider this variation
a the average money -price of corn.as the effect rather of fome
gradual rife in the real value of filver in the European inarket,
éi 7 than

THE iWGAL AH OF NATIONS,

than of-any fall in: the real, average value of corn. Corn, ithas © HAP.
already been obferved, is at diftent periods of time a more accurate i.

meafure of value than cither filver or perhaps any other, commo-
dity. When after the difcovery of the abundant mines of America,
corn rofe to‘ three and four times. its former money price, this
change was univerfally afcribed, not to any rife in the real value
of.corn, but to a fall in the real value of filver. If during the
fixty-four firft, yeats of the prefent century, therefore, the average
money, price of corn has fallen fomewhat below what it had been
during the greater. part of the lait century, we fhould in the fame
manner impute this change, not to any fall in the real value of corn,
but to fome rife in the real value of filver in the European market.

‘Tue’ high price of cotn during thefe ten or twelve years paft,
indeed, has occafioned a fufpicion that the real value of filver ftill
continues to fall in the European market. This high price of
corn, however, feems evidently to have been the effect of the extra-
ordinary unfavourableriefs of the feafons, and ought therefore to be

‘regarded; ‘not as & pernianent, but as a tranfitory and occafional

event. "The (afons' for thefe ten or twelve years paft have been
unfavourable through the greater part of Europe; and the dif-
orders of Poland have very much increafed the fcarcity in all thofe
countries, which -in dear years ufed to be fupplied from that
market. So long a courfe of bad feafons, though not a very

common event, is by no means @ fingular one; and whoever has -

enquired much into the hiftory of the prices of corn in former

times, “will be at ‘no lofs to recolleét feveral other examples of the

fame kind. ‘Ten years of extraordinary fcarcity, befides, are not
more wonderful than ten: years of. extraordinary plenty. The low
price of corn from 1741 to 1750, both inclufive, may very well
Be fet in oppofition to its high priee during thefe laft eight or ten
years. From'r7g2° to 1750, the average price of the quarter of
- Vou. I. K k nine

ae BI ss ec
Se So HE aii ere nA ptgnetre

#59

‘THE, NATURE) AND, CAWSES,,QF

HAGE nine buthels of the belt wheat at Windlor market, it, appears: from
ten the accounts | of Eton Colleges. wag,only, AL, 139) .94-4-, Which, is

nearly 68, :3.d. below, the average price of, the fixty-four, Girft years
af the prefent century, The average price of the quarter of Sight
buthels. of middle, wheat,, ames, opty, according. tp ici
to have been, during nei ten, Tea, only 11,68, 8d...)

BETWEEN 1744 ie 1750p, Bi tial the bounty mutt. have
hindered the ; price /of;,corn, from. falling, o.Jow in the home, market
as, it) naturally would, haye done, During thefe ten, years, the
quantity of all forts of grain exported, it appears, from the cu,
tom-houfe books, amounted to no lefs than eight millions twenty-
nine thoufand one hundred and fifty-fix quarters one bufh “
The, bounty... paid for ;this, amounted, to 1,514,962. 178. 4 v1
In, 4749 accordingly, Mr, Pelham, at that time. prime, minifter,
obferyed, tothe Houle of Commons, that for the three years pres
ceeding a very: extraordinary fum had been paid as. bounty for the
exportation. of com, He. had, good reafon to make this. obfer-

vation, and in fhe following year, he might have had fill better!

In_ that fingle year the bounty paid’ amounted to ‘no tee thal
32491761. ios. 6d, It is unneceflary to obferve how much this
forced exportation muft have raifed the price of corn above ses
it otherwife would have been in the smi market, .

B pel

* Ar the end of the accounts wartleiced to this yelp the teader
will find the particular account of’ thofé ten years feparated! from.
the reft. He will find thers too the particular account’of the
preceeding ten years, of which the average is likewife below,’ the!
not fo much below, the general: average ‘of the fixty-four firft,
years ‘of the century.: The year 1740, however, was ‘aj year of
extraordinary fcarcity: Thefe twenty years preceeding’ 1750, may:
very well be fet in oppofition to the twenty preceeding 1770. :As,

yn the

‘tHe WEALTH OF NATIONS:

Ane F6riHiOt! were "wy Bobd Weal” befow *tHe ae average of the
centdry, notwithitanding the 'intérvention of ofie or two dear’ year’s}
{6" the latter’ ‘have’ been’ a good Meal” allove ie, notwithitanding the
intervention ‘df ohe ot “two ‘chidap* Gites, of 1459; for’ example.
Ifthe Porites ‘Have not Been’ ds rich’ beta’ ‘the general aver:

as the latter Havé beeri above ‘if, we’ ought probably to stnphite
it to the bounty. The change has evidently been too fudden to
Bé*afctibed to ‘any change inthe value ‘of filver; which is always
flow" and ‘gradual, ‘The'fuddentefs' OF the effketcait! be ‘acdouhted
for orify bya caiife wit can® ri fuddenly, the accidental
variation of we — | up

“VIMsw

aE money p price of labour i in Great Britain’ has, ifideed, rifen

2g.
CHAE
xi.
pay

Get the courfe of tlie ray ‘centur rhs, however feems to.

effect, ‘not fo much of afy’ dimi itidn in the ‘Waltte OF filver
in re Europe an market, as ‘of an increafe in’ the demand for
labour i in: ‘Great Britain, arifin 5 from the great, ‘and’ sini ‘univerfal
Pro fperity, “of” the country. | tn ‘France, ‘a Net Ot’ altogether
lo "profperous, the motiey Price “of labour has, ince the tniddte
of, the aft century, been obfetved to fink gradually with | ‘the
average. money price of corn. Both in the laft century and i in
the prefent, the day-wages.. of common. Jabour, are there fad to
have been pretty uniformly about the twentieth part of the ave-
rage..price of the feptier of wheat, a,meafure which. containg a

littleymore than four Winchefter buthels. ‘In Great Britain the.

real recompence of labour, it has. already been, fhown, the. real,
quantity, of the, neceffaries...and,conveniencies of , life which, are
given to.the labourer, has. increafed, confiderably ,during, the courfe
of, the, prefent century. The; rife. in.its money :price::feems: ta
have been ; the: effect, not. of any diicfinution» of! the value ‘of
filver iny the: general markety of ‘Europe,’ but Jof a rifein ‘the reat

ons Kk 2 price

252 THEO NATUREOAND ‘CAUSES! ‘OF

BOOK price of labour inthe particular »market) of Great Britain,’ oni cal
te to the peculiarly, happy circum ftanees of | the ee 18) of
rere mc
For fome time ‘after the firft diftovery of tees filver would to,
continue to fell at its former, of not much below its former price. cor
The profits of mining would for fome time be very great, and much
above their natural rate. Thofe’ who ‘imported that’ nietal' into
Europe; however,: would foon find that the whole annual importation fall
could not ‘be difpofed of ‘at this high ‘price. ‘Silver would ‘graz loy
dually exchange for’ a‘ fmaller and':a fmaller’‘quantity of’ goods. or
Its price would fink gradually lower and lower till it fq to: its wh
natural price; or to what was juft fufficient to pay, according for
to their natural rates, the wages of the labour, the profits of ‘the duc
ftock, ‘and ‘the rent’ of the land, which muft be paid in ‘order has
to bring it from the mine'to the market. Inthe greater part kep
of the filver mines of Peru, the tax of the king of Spain, amount- har
ing to a fifth of the grofs produce, eats up, it has already becn of |

obferved, the whole rent of the land. This. tax was originally a
half; it; foon afterwards fell to:a third, and then toa fifth,’ at
which, rate ,it ftill continues. In: the greater part of the filver
mines of Peru this, it feems, is all that remains after replacing
the ftock of the undertaker of the work, together with its ordinary
profits; and it feems to be univerfally: acknowledged that. thefé
profits, which were once very high, are now as low’ as they can
well be, confiftently with carrying on the works.

Tne tax of the king of Spain was reduced to a fifth part of
the regiftered filver in 1564, one and thirty years’ before 1635,
the date ofthe difcovery of the mines of Potofi. In the’ courfe
of a century, or before 1636, thefe mines, the moft fertile in all
‘America, had time fufficient to produce their full effect, or to
reduce the value of filver in the European market as: low as it pe
could

TH La

WBRALTH OF NATIONS.

could.well fall; while it continued: ito: pay this, tax teithe king 0 1) 6"
of Spain. A hundred years istime: fufficient to reduce any com- ve
modity, of which there is no monopoly, to its natural price, or
to ths, loweft price at which, . while, it pays a, particular tax, it ¢an
continue to be fold for;any confiderable. time ees

mn
253

Tue price of filver ‘athe, Savesiont saa might perhaps have
fallen, {till lower,,,.and/.it might. have, become. neceflary: either to
lower the. tax,.upon it;,,in,the fame manner)as that upon gold,
on to give up working the greater, part of the American mines
which are now wrought... The: gradual. increafe of the demand
for filver, or the gradual enlargement of the market for the pro-
duce of the dulver mines of, America, is probably the caufe, which
has prevented this, from, happening, and. which . has; not only
kept up, the value of filver in the European market, /but has. per-
haps even raifed it fomewhat higher than. it was ‘about ane middle
of the laft diwide . 7

Since the: fr difeovery of America, the market for the pro-
duce’ of its: filver mines has been growing gradually more and
more extenfive.

First, The market of Europe has’ become gradually more’ and
more extenfive. Since the difcovery of America, the greater part
of Europe has been much improved. England, Holland, France,
and Germany ; even Sweden, Denmark, and Ruffia, have all ad-
vanced .confiderably both in agricultuye snd in manufactures. | Italy
feems not to! have.gone: backwards, ‘Ihe fall of Italy preceeded
the conqueft of Peru. Since that time it feems rather to ‘have
recovered a little. Spain and. Portugal, indeed, are fuppofed to
have gone backwards. Portugal; however, is but a very fmalt
part of Europe, and the. declenfion of Spain is not, perhaps, fo
great

Sage erere, .

Saar ee

Fe a
.

2 ae ee

254

THE 'NATURE’ AND! ©4183 OF

BOOK great as id comthonly'ttitaginied,'® WHE Beghinihig of the Axteenth
tes ecntury, | Spain ‘was'a very’ poor Cotititity, evén'in’ comparifon with

Frarice, which has been fo’ much improved’ fince that ‘time,’ It
owas the well ‘knowii remark ‘of the’ Emipéror ‘Charles V,‘'who' hail
travelled fo frequently through betty countiies, that every’ thing
abounded’in France, ‘but that:every thing ‘was! wanting in Spain.
The jincreafing produce ‘of the agriculture and manufactures of
Burope mult neceflarily“have: required’ ‘a gradual increafe in the
quantity ‘of filver coin’to circulate'it } and! the -increafing ‘number
of wealthy individuals muft have \ required the like increafe “in the
qesition of their age anil other ornaments ob ave. HB TNOISND

SECONDLY, America i 18 itfelf a new market for the re

its owit filver | mines ; and s its advances ir in agric ture, in i pe

ana’ popiilation, ‘ate mich more rapid than ‘thole 9

thriving: ‘countries in ‘Europé, its demand muft pak pa

more rapidly. The Englith colonies are altogether a new (mat rk,

which, partly for coin' and partly for plate, requires ‘a continy

atipmenting fipply of filver through a great'c continent Ay a =
never was any demand before. The greater part t too 0 of th e Spanifh h

and Pottuguefe colonies are altogether new markets, ) ‘New Gra-

nada, the Yucatan, Paraguay, and the Brazils Were, vig sar

vered by the Europeans, inhabited‘ by favag ¢ ‘mations, who
neither arts nor agriculture. A confiderable degree of both
now been introduced into all of them. Even Mexico and uM

though they cannot be confidered as altogether new markets, are.

certainly much more ‘extenfive ones than they ever were before,

WI MST!

After all the wonderful’ tales which Have been. publithed concern

ing the fplendid ‘ftate'of thofe countries ‘in antient times, whoever

reads, ‘with ‘any dégree of fober judgement, the hiftory < of their fart,
difeovery ‘and’ ‘énquétt, ‘will ‘evidently’ difcern that, in arts, ‘agti-

culture aiid ebitimierde, theit' inhabitants were much more ignorant
than

Mt co +O *

JPHE WEALTH OR ATOMS
than.th, Tartars, of the Whrning are, a prafent... Bem the, Perur

SEAR

yians, the more civilized nation of the twa, though they made; vie aa

of gold and filver, ag ornaments, had nocoined money of any, kind,
Their whole commerce, was ¢atried on, by. barter,,and, there was
accordingly, {carce any, divifion, ,of;.Jabour among, them. .. Thofe
who cultivated. the ground were obliged|to, build their own houfes,
to make their, own, houfhold. furniture; thein: own cloaths,. thoes,
and inftruments of. agriculture. ,The, few. artificers among thems
are faid to, have been, all), maintained by, the fovereign, the nobles,
and the priefts, and wereiprobably their fesvants. or flaves. | All the
ancient arts of Mexico, and Peru have: never furnifhedione fingle
manufacture to Europe. The Spanifh armies, though they fcarce
ever exe eeded five hundred men, and frequently did not amount,to
half” ene’ ‘hum ay found almoft every where great difficulty i In
proctiring fubh ence. The. famines which they are faid to, have
occafloned almoft wherever they went, in cquntries too which at the
fame time are reprefented as very populous. and, well cultivated,

pi ciently demonitrate that the ‘tory of this populoutnels and high,

ng 18 in a great meafure fabylous,, , The Spanith colonies
are ander a government in many re{pects lefs favourable to agricul-.
ture, ‘improvement, and population, than that of the Englith
cotonies. arhey feem, however, to be advancing i in all thefe much.
more! r ap y than any country in Europe. In a fertile foil and,
habp py: “ai imate,. the great, atl and. cheapnels of land, a cite.
curhftance teenies to all new colonies, is, it feems, fo great an,
advantage ‘as to compenfate many defects in civil government.
Frezier, ‘who vifited Peru in 1713, reprefents. Lima as. containing,
between twenty-five and twenty-eight thoufandinhabitants. Ullog,,
who refided in the fame country between, 1740, and, 47465, repre~.
fents it as containing more than fifty thoufand, The difference, in;
their accounts of the populoufne(s of feveral other principal towns:

in Chili and, Peru is nearly the fame; and.as there feems.ta.be nov.

4 reafon,

THE NATURE AND CAUSES OF

B 9° K reafon to doubt of the good information’ of either, it marks an
eye iticreafe which is fcarce inferior to that of the English colonies,
America, therefore, is)'a new market forthe produce of its own
filver mines, of which the demand muft increafe hi more va
thai that of the: ssie sgh countryiin Buropes'!

Trirpiy, The Eaft-Indies is another market for the produce
of the filver mines of America, and a market which, from the
time of the firft difcovery ‘of thofé mines, has been continually
tdking off a greater and a greater quantity of filver.’ Since that
time,’ the ‘direct trade between America and the Eaft-Indies, which
is carried on by means of the Acapulco fhips, has been continually
‘augmenting, and the indirect intercourfe oy the way of Europe
has ‘been augmenting in a ftill greater proportion. During the
fixteenth century, the Portuguefe were the only European nation
who carried on any regular trade to the Eaft-Indies. In the laft
years of that century the Dutch began to encroach upon. this
monopoly, and in a few years expelled them from their principal
fettlements in India. During the greater part of the laft century
thofe two nations divided the moft confiderable part of the Eaft-
India trade between them; the trade of the Dutch continually
augmenting in a ftill greater proportion than that of the Portuguefe
declined. The Englifh and French carried on fome trade with
India in the laft century, but it has been greatly augmentcd in the
courfe of the prefent. The Eaft-India trade of the Swedes and
Danes began in the courfe of the prefent century. Even the Muf-
covites now trade regularly with China by a fort of caravans which
go over land through Siberia and Tartary to Pekin. The Eatt-
Andia trade of all thefe nations, if we except that of the French,
which the laft war had well nigh annihilated, has been almoft con-
tinually augmenting. The increafing confumption of Eaft-India
geods in: Europe is,-it feems, fo great as to afford a gradual in-

; 7 creafe

Sse BS Cee ee Ee ee

iTrrtaa- ai< 1

‘PHE’ WEAUTH’ OF NATIONS.

creafe of employmentito themiall. Tea,: for example, was adrug CHAP.
very little ufediin Europe before the middle of the laft century. At a.

prefent the value: of. the: tea, annually. imported -by the Englith
Ralt-India.«Company; : for (ithe jufe: of: their,own countrymen,
amounts :to more:than.a million::and)a: half ‘a year; and-even this
is not enough ; a great deal more being conftantly fmuggled into
the country from the ports of. Holland, from. Gottenburg in
Sweden, and from. the. coaft of France too. as long as the French
Eaft-India Company was in profperity. The confumption of the
porcelain of China, of the fpiceries of the Moluccas, of the. piece
goods of Bengal, and of innumerable other articles, has increafed
very nearly in a like propoction, . The tunnage accordingly of all
the European fhipping employed in the Eatft-India trade at any
one time. during the laft century, was not, perhaps, much. greater
than that of the Englifh Eaft-India CORRE? before the late reduc-
tion .of their fhipping.

‘Bur in‘the Baft Indies, particularly in China and Indoftan,
‘the value of’ the precious metals, when the Européans firtt began
to’ trade to thofe countries, was much higher than in Europe ; and
fe fiill continues to be fo. In rice countries, which generally yield
two, fometimes three crops in the year, each of them more plen-
‘gifal-than any common crop of corn, the abundance of food muft
‘be much greater than in any corn country of equal extent.. Such
‘countries are accordingly much more populous. In them too the
Yich, having a greater fuper-abundance of food to difpofe of beyond
‘what they themfelves can confime, have the means of purchafing a

muelr greater quantity of the labour of other people. The retinue

‘of'a grandee in China or Indoftan accordingly is, by all accounts,
‘much more numerous and: fplendid than that of the richeft fubjects
in Europe. The fame fuper-abundance of food, of which they
‘Have''the difpofal; enables them to give a greater quantity of it
‘forall: thofe . fingular and rare productions which: nature furnifhes
“Vor. I. Ll but

258 THE ,.NATURE,,AND CAUSES, OF

BOOK. but in, very fmall quantities ;, fuch .ag. the. presious metals, and the

ae precious ftones, the great, objects. of the competition of the. rich.
Though the mines, therefore, which fupplied the Indian market
had been as abundant. as thofe which fupplied, the, European, fuch
commodities would. naturally exchange for. a greater quantity of
food in India than in Europe. But the mines which fupplied the
Indian market with the precious metals feem to have been a good
deal lefs abundant, and thofe which fupplied. it with the precious
ftones a good deal more fo, than the mines which fupplied: the
European. The precious metals therefore would naturally exchange
for fomewhat, a! ‘greater quantity of the precious ftones, and for a
much greater quantity of food in India than in Europe. The
money price of diamonds, the greateft of all fuperfluities, would be.
{omewhat lower, and that of food, the firft of all neceffaries, a
great ‘deal ‘lower’ in ‘the one country than in the other. But the
real price of labour, the real quantity of the neceffaries of life which:
is given to the labourer, it has areas ‘been obferved, is lower both
in’ ‘China and Rae hie the two great markets of India,. than it is.

we of fool is wat lower in thdia than in aus & the money.
ptice’ of labour is. there tower” upon a. double account; upon.
account both of the fmall’ quantity of food which it will purchafe,
and of the low Price of that food, But in countries of equal art.
and induftry, the money price of the greater part of manufactures
will be in proportion to the money price of labour ;.and jn manu-.
fa€turing art and induftry, China and Indoftan, tho’ inferior, feem.
not to be. much inferior to any part.of Europe. The money. price
of the greater part of manufactures, therefore, will naturally be.
much lower in thofe great empires than it is. any where in Europe.
‘Through the greater part of Europe too the expence of land-car-.
nage increales very much both the real and nominal price.of moft

manue

THE ‘WEALTH OF NATIONS.

manufabares.’ "It colts more labour, arid therefore more money, to
bring firft the materials, ‘and afterwards’ the compleat manufacture’
to market. In China and Indoffan the extent and variety of inland
riavigations’ fave ‘the’ greater Ba) of this labour, and confequently of
tif money,’ ahd” thereby re duce ftill lower both’ the real and the,

0 nominaf price of the ’ greater ‘part of their manufaétures. Upon
at thefe accounts, the precious metals are'a commodity which it
always has b ‘been, and ftill continues to be, extremely advantageo’ a4
to ich be from Europe to. India. et is fearce Ay, comm Toy,

purchafe « or peuany ‘pens quantity of labour and med fa
in India... It is more | vantageous too to carry f ‘filver thither than

gold ; ; "becaule j in China, and the greater part of the other, markets,
of India, the proportion between fine filver and fine gold is but as.
ten to one;, whereas im Europe it is as fourteen or fifteen to one.

In China, and the greater part of the other markets of India, ten
ounces of filver will purchafe an ounce of gold: ; in Europe. it,
requires from fourteen to fifteea ounces, . In the cargoes, there-.
fore, of the greater part of European fhips which fail to India,

filver has generally been one of the moft valuable articles. It is

the moft valuable article in ‘he Acapulco fhips which fail to
Manilla. The filver of the new continent feems in this manner to,
be the principal commodity by which the commerce between the

two extremities of the old one is carried on, and it is by means of
it chiefly that thofe diftani parts of the world are connected with

one another.

In order to fupply fo very widely extended a market, the quan-
tity of filver annually brought fromthe mies muft not only be
fufficient to fupport that contirwal imereafe both of coin: and of
plate which is required in all thriving countries ; but to repair that
Lia continual

its
c HA P;
> +e
ae

260

THE NATURE AND CAUSES OF

i ssa continual wafte.and, confumption of filver which takes: place in all
y= countries where that metal is: ufed..

Tue continual confumption of the precious metals in coin by:
wearing, and in plate both by wearing and cleaning, is very fen-
fible; and in commodities of which the ufe is fo very widely
extended, would alone require a very great annual fupply. The
confumption of thofe metals in fome particular manufactures,
though it may not perhaps be greater upon the whole than this
gradual confumption, is, however, much’ more fenfible, as it is
much more rapid. In the manufactures of Birmingham alone,.
the quantity of gold and filver annually employed in gilding and
plating, and thereby difqualified from ever afterwards appearing in:
the fhape of thofe metals, is faid to amount to- more: than fifty.
thoufand pounds fterling. We may from thence form fome notion:
how great muft be the annual confumption in all the different
parts of the world, either in manufactures of the fame kind with.
thofe of Birmingham, or*in laces, embroideries, gold’ and ‘fils:
ftuffs, ‘the gilding of books,’ furniture, &c; ‘A corifiderable’ quan-
tity too muft be annually loft: in tranfporting 'thofe metals from
one place to another both by fea and’ by land. In the greater part
of the governments of Afia, befides, the almoft univerfal cuftom
of concealing treafures in: the bo: Is of the earth, of which the:
knowledge frequently dies with the perfon who makes the conceal«
ment, mutt occafion the lofs ofa ftill greater quantity.

THE quantity of gold and filver imported at bexh Cadiz and
Lifbon (including not only what: comes. under :regifter, but what
may be fuppefed to be fmuggled) amounts, according to. the beft
accounts, to about dix millions fterling a yeai.

AccoRDING

THE WEALTH OF NATIONS. '

26M

} . Accorpine: to :Mr:Meggens the annual importation. of the: CAAP a
; precious metals into Spain, at an: average of fix years; viz. from cebletane

1748 to:1753, beth uiclufive ; and into Portugal, at an average of

feven years 3) viz.ifrom1747 to 1753» both inclufive; amounted

E in filver to:-1,103;107 pounds weight; ‘and. in gold to 49.940:
pounds weight. . The-filver,) at fixty-two fhillings the pound. Troy,
5 amounts to. 354134311. 108. iterling. The gold, at forty-four
4 guineas, and a half the pound Troy, amounts to 2,333,446]. 14s..
fterling. Both together amount to 5,746,8781. 45. fterling. The
2 account of what was im orted under regifter, he affures us is exact.
di \ He gives us the detail of the particular places from which the gold
? \ and filver were brought, and of the particular quantity of each
d metal, which, according to the regifter, each of them afforded..
1 | He-makes an allowance tco for the quantity of each metal which.
y he! fuppofes may have been fmuggled. The great experience of this:
M: judicious merchant renders his opinion’ of confiderable weight. '
\y ‘ e
li

Accorpine to the eloquent and fometimes well. infcrned:
author of the philofophical and. political hiftory of the. eftablifli-.
ment of, the Europeans in the two Indies, the annual importation:

if of regiftered gold and filver into Spain, at an average of eleven:
rt

® years; viz. from 1754 to 1764, both inclufive; amounted to:
Oy 13,984,185 4 piaftres often reals. Om account of what, may, have:

been fmuggled,. however, the whole annual importation, he fup--
pofes, may have amounted. to feventeen millions of piaftres ;:.which
at 4s. 6d. the piaitre, is equal to 3,825,000]. fterling. Heigives:
the detail too of the particular places from which the gold and:

a - filver were brought, and of the particular. quantities of each-metal.
mi a which, according to. the regifter, each of them afforded. He in-
Lt | forms us too, that if we were to judge of the quantity of gold.

annually imported from the Brazils into Lifhon. by the amount of.
the tax paid to the king of Portugal, which it feems is one-fifth.
of.

262

THE NATURE AND CAUSES OF

BOOK of the ftandard metal, we might value it at ¢ighteen millions of
L-——w cruzadoes, ot forty-five: millions: of’French livres, equal to about

‘two millions ‘fterling.' On account of what ‘may have’ been
fmuggled, however, we may’ fafely, he fays, add ‘to this’ ‘fum' an
eighth more, or 20,0001. fterling, fo that the whole: will amount
to. 2,250,000], fterling. According to this aecount, therefore,
the whole annual importation of the precious metaiz.into both
Spain and Portugal, amounts to about 6,075,0001. fterling:

SeveERAL other very well authenticated accounts, I have been
affured, agree in making this whole annual importation amount ‘at
an average to about fix millions fterling ; fometimes a little more,
fometimes a little lefs.

. "Tue annual importation of the precious metals into Cadiz and.
Lifbon, indeed, is not equal to the whole annual produce of-the
mines of America, Some part is fent annually by the Acapulco
fhips to. Manilla ;. fome part is employed! in the ‘contraband trade
which: thie Spanith. colonies: carry on. with thote of other European’
nations; and fome part, no doubt, remains in'thecountry. The
mines of America, belides,: are by: no means the only’ gold and
flyer: mines. in the world, .' They are; however, by far the moft
abundant. The produce of ‘ali the other:mimes Which are known,
is infignificant,. it; is adtnowledged, in comparifon with: theirs ;
and the far greater part of their produce, ‘it is likewife acknow-
lJedged,. is annually imported. inte Cadiz and Lifbon. + But the
confumption of: Birmingham ‘alone, at: the rate of fifty thoufand:
pounds:a year, is equalto-the hundred and twentieth part of this’
annual importation at. the rate: of fix millions a-year. The whole
annual confumption-of gold and filver therefore irr all the different
countries of the world‘where thofe metals are ufed,; may perhaps be
mearly equal to the whole annual produce. Fhe remainder may’

- be

, i ee ae Se

THE WEALTH OF NATIONS. "

263

be no,anoue, than fufficient to, fapply the increafing: demand of all CHAP.
thriving, countries,...1¢ may even have fallen fo far fhort of ‘this- —y—

demand.as, fomewhat. to -raife the none of: thofe: metals in the.
Rarsne selina hig

nyonrs iiw i : ee | SEUrh

on quantity of brats ol iron’ anit brought from: the
mine to the market.is. out ofall proportion greater than that: of:
gold and filver. Wedonot, however, upon'this account, imagine
that thofe coarfe metals are likely to multiply beyond the demand,.
or, to become gradually: cheaper and cheaper. Why fhould we.
imagine that the precious. metals are. likely. to: do fo?! The coarfe
metals indeed, though, harder, are) put to much harder ufes; and.
as they are of lefs value, lefs care is employed in their prefervation.
The. precious metals, however, are not neceffarily immortal any.
more than they, but are liable.too to, be ua wafted and .confumed:
ina great variety. of ways.

Tue price of all metals, though: liable ‘to flow ‘and gradual
variations; ; varies lefs from year to year than that of almoft any
other part of the rude produce of land;. and the ‘price of the:

precious metals is even lefs liable to fudden variations than that of.
the coarfe ones. The durablenefs of metals is the foundation of ©

this extraordinary fteadinefs of price.. The corn which was brought

to marketlaft year, will be all or almoft all confuumed ‘long before -

the end of this year. But fome part of the iron which was brought:
from the. mine two or. three hundred years ago, may be ftill in:
ufe, and perhaps fome part of the gold which was brought from |
it.two or three thoufand years ago. The different maffes of corn:
which in different years muft fupply the confumption of the world, .

will always be nearly in proportion co the refpettive product of.
thofe. diferent: years. But the proportion between the different

maiies of4zon which may be in ufe in ‘two different years, will be:

4. very:

264 ! THE!) NATURE AND CAUSES ‘OF .

B oP K very little affected ‘by any accidental difference in the produce of Cz
iy the iron mines'of thofe two years; and the proportion between the ou
mafies of gold will be ftill lefs affected by any fuch difference in the mi
‘ produce of the gold mines. Though the prosduce of the greater mi
part of metallick mines, therefore, varies, perhups, ftill more from {til
year to year than that of the greater part of corn fields, thofe vari- cig
ations have'not the fame effect upon the price of the one fpecies
of commodities, as upon that of the other. |
‘ an
is ¢
Variations in the Proportion between the refpective Values of are
Gold and Silver. gre
nile fuy
BE FORE the Reais of the mines of America, the value of to
fine gold to fine filver was regulated in the differént mints of

Europe, between the proportions of one, to ten and one to twelve ;
that is, an ounce of fine gold was fuppofed to be worth from ten to
twelve ounces of fine filver. . About the middle of the laft century
it came to be regulated, between the proportions of one to fourteen
and one to fifteen; that is, an ounce of fine gold came to be fup-
pofed worth between fourteen and fifteen ounces of fine filver.
Gold rofe in its nominal value, or in. the quantity of filver which
was given for it. Both metals funk in their real value, or in the
quantity of labour which they could purchafe ; but filver funk more
than gold, Though both the gold and filver mines of America
exceeded in fertility all thofe which had ever been known before,
the fertility of the filver mines had, .it feems, been proportiqaahly
ftill greater than that of the geld ones,

THE great quantities of filver carried annually from Europe to
India, have, in fome of the Englifh fettlements, gradually reduced
the value of that metal in proportion to gold, In the mint of
7 Calcutta,

THE WEALTH-OF NATIONS.

Calcutta, an ounce of fine gold is fuppofed to be worth fifteen
ounces of fine filver, in the fame manner as in Europe. It is in the
mint perhaps rated too high for the value which it bears in the
market of Bengal. In China, the proportion of gold to filver
{till continues as one to ten. In Japan it is faid to be as one to
eight.

Tue proportion between the quantities of gold and filver
annually imported into Europe, according to Mr. Meggens’s account,
is as one to twenty-two nearly ; that is, for one ounce of gold there
are imported a little more than twenty-two ounces of filver. The
great quantity of filver fent annually to the Eaft Indies, reduces, he
fuppofes, the quantities of thofe metals which remain in Europe
to the proportion of one to fourteen or fifteen, the proportion of
their values. The proportion between their values, he feems to
think, muft neceffarily be the fame as that between their quantities,
and would therefore be as one to sve ty etwas, were it not for this
greater exportation of filver.

Bur the ordinary proportion between the refpective values of two
commodities is not neceflarily the fame as that between the quan-
tities of them which are commonly in the market. The price of an
ox, reckoned at ten guineas, is about threefcore times the price of a
lamb, reckoned at 3s. 6d. It would be abfurd, however, to infer
from thence, that there are commonly in the market threefcore
lambs for one ox: and it would be juft as abfurd to infer, becaufe
an ounce of gold will commonly purchafe from fourteen. to
fifteen ounces of filver, that there are commonly in the market
only fourteen or fifteen ounces of filver for one ounce of gold,

Tue quantity of filver commonly in the market, it is probable,
is much greater in proportion to that of gold, than the value of a
Vou. I. Mm certain

265
CHAP.
XI.

yee

266 THE NATURE AND CAUSES OF

BO@K certain quantity of gold is to that of an equal quantity of filver,
u— The whole quantity of a cheap commodity brought to market,
is commonly, not only greater, but of givater value, than the
whole quantity of a dear one. The whole quantity of bread
annually brought to market, is not only greater, but of greater
value than the whole quantity of butcher’s-meat; the whole
quantity of butcher’s-meat, than the whole quantity of poultry ;
and the whole quantity of poultry, than the whole quantity
of wild fowl. There are fo many more purchafers for the cheap
than for the dear commodity, that, not only a greater quantity of
it, but a greater value can commonly be difpofed of. The whole
quantity, therefore, of the cheap commodity muft commonly be
greater in proportion to the whole quantity of the dear one, than the
value of a certain quantity of the dear one, is to the value of an equal
quantity of the cheap one. When we compare the precious metals with.
one another, filver is a cheap, and gold a dear commodity. We
ought naturally to expect, therefore, that there fhould always be
in the market, not only a greater quantity, but a greater value of.
filver than of gold, Let any-‘man, who has a little of both, com-
pare his own filver with his gold plate, and he will probably find,.
that, not only the quantity, but the value of the former greatly
exceeds that of the latter. Many people, befides, have a good:
deal of filver who have no gold plate, which, even with thofe who
have it, is generally confined to watch cafes, fnuff-boxes, and fuch
like trinkets, of which the whole amount is feldom of great value. In;
the Britith coin, indeed, the value of the gold:preponderates greatly, ,
but itis not fo ir: that of all countries. In the coin.of fome: coun-.
tries the value of the two metals is nearly equal:. In the Scotch,
coin, before the union with England, the gold preponderated very.
little, though it-did fomewhat, as it. appears by the.accounts of
the mint. In the coin of many countries the filver preponderates.
In France, the largeft funs are commonly paid in that. metal, .

and

+p eo eo eee Se eee

THE WEALTH OF NATIONS,

- and it is there difficult to get more gold than what it is neceffary to

carry about in your pocket. The fuperior value, however, of the
filver plate above that of the gold, which takes place in all
countries, will much more than compenfate the preponderancy of
the gold coin above the filver, which takes place only in fome
countries.

Tuovcn, in one @nfe of the word, filver always has bees,
and probably @!: ill be, much cheaper than gold; ve! i
another fenfe, ; perhaps, in the prefent ftate of the
European market, 2 be fomewhat cheaper than filver. A
commodity may be {aid to be dear or cheap, not only according to
the abfolute greatnefs or {mallnefs of its ufual price, but according
as that price is more or lefs above the loweft for which it is poflible
to bring it to market for any confiderable time together. This
loweft price is that which barely replaces, with a moderate profit,
the ftock which muft be employed in bringing the commodity
thither. It is the price which affords nothing to the landlord,
of which rent makes not any component part, but which refolves
itfelf :altogether:into wages and profit. But, .in the prefent ftate
of the European market, gold is certainly fomewhat nearer to this
loweft price than filver. The tax of the king of Spain upon gold
is only one-twentieth part of the ftandard metal, or five per cent. ;
whereas his tax upon filver amounts to one-fifth part of it, or to
twenty percent. In thefe ‘taxes too, it has already been obferved,
confifts the whole rent of the greater part of the gold and filver
mines of Spanith America; and that upon gold is ftill worfe paid
than that upon filver. The profits:of the undertakers of gold mines
too, astheymore rarely make.a fartune, mutt, in general, be ftill more
moderate than; thofe of the undertakers of filver mines. The price
of Spanifh gold, therefore, as it affords both lefs rent:and lefs profit,
muft, in the European market, be fomewhat nearer to the loweft

Mm 2 price

367

CoA P,
——~

,)
“VY.
<:* oe

FEFEF OE

lacs Il

1.25

awn
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iu
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_
Oo.
In
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Ss

A o>
a (ne

THE NATURE AND CAUSES OF

price for which it is poffible to bring it thither, than the price of
Spanith filver. The tax of the king of Portugal, indeed, upon
‘ the gold of the Brazils, is the fame with that of the king of Spain
upon the filver of Mexico and Peru; or one-fifth part of the
ftandard metal. It muft ftill be true, however, that the whole mafs
of American gold comes to the European market, at a price nearer
to the loweft for which it is poffible to bring it thither, than the
whole mafs of American filver. When all expences are computed,
it would feem, the whole quantity of the one metal cannot
be difpofed of fo advantageoufly as the whole quantity of the
other,

Tue price of diamonds and other precious ftones may, perhaps,
be ftill nearer to the loweft price at which it is poffible to bring them.
to market, than even the price of gold.

Were the king of Spain to give up his tax upon filver, the
price of that metal might not, upon that account, fink immediately
in the European market. As long as the quantity brought thither
continued the fame as before, it would {till continue to fell at the
fame price. The firft and immediate effect of this change, would be
to increafe the profits of mining, the undertaker of the mine now
gaining all that he had been ufed to pay to the king. Thefe great
profits would foon tempt a greater number of people to undertake
the working of new mines. Many mines would be wrought which
cannot be wrought at prefent, beeaufe they cannot afford to pay
this. tax, and the quantity of filver brought to market would, in
a few years, be fo much augmented, probably, as to fink its price
about one-fifth below its prefent ftandard. This diminution in the
value of filver would again reduce the profits of mining nearly to
their prefent rate,

“THE WEALTH OF NATIONS.

269

‘Ir: is not indeed very probable, that any part, of a tax which © airs
affords fo important a revenue, and which is impofed too upon “~

one of the moft proper fubjects of taxation, will ever be given’ up:
as long as it is poflible to pay it. The impoflibility of paying it,
however, may in time make it neceffary to diminifh it, in the
fame manner as it made it neceflary to diminifh the tax upon gold.
That the filver: mines of Spanifh America, like all other mines,
become gradually more expenfive in the working, on account of
the greater depths at which it is neceflary to carry on the works,
and of the greater expence of drawing out the water and of fupplying
them with frefh air at thofe depths, is acknowledged by every body
who has enquired into the ftate of thofe mines.

Tuese caufes, which are equivalent to a growing fcarcity of

filver, (for a commodity may be faid to grow fearcer when it
becomes more difficult and expenfive to collect a certain quantity
of it), muft, in time, produce one or other of the three following
events. The increafe of the expence muft either, firft, be com-

penfated altogether by a proportionable increafe in the price of
the metal; or, fecondly, it muft be compenfated altogether by a.

proportionable diminution of the tax upon filver;. or, thirdly, it
muft be compenfated partly by the one, and partly by the-other of
thofe two expedients. This third event is very poffible. As gold
rofe in its price in proportion to filver, notwithftanding a great
diminution of the tax upon gold; fo filver might rife in its price
in proportion to labour and commodities, notwithftanding an equal:
diminution of the tax upon filver..

Tuart the firft of thefe three events has already begun to take:
place, or that filver has, during the courfe of the prefent.century,,
begun to rife fomewhat in its value in the European. market, the:
facts and arguments which have. been alledged above difpofe me to:

believes.

270

THE NATURE AND CAUSES OF

BOOX teliéve. ‘The rife, indeed, ‘has hitherto ‘been ‘fo very‘fmall, that,
~~ ‘after all that has been faid, it may, perhaps, appear to many people

‘uncertain, hot only whether this event ‘has actually taken ‘place,

but whether ‘the contrary may not have taken place, or whether ‘the
value of filver ‘may not {till continue to fall in ‘the European
market. .

Grounds of the Sufpicion that the Value of Silver fill continues
to decreafe.

‘THE increafe of the wealth of Europe, and the popular notion
that, as the quantity of the precious metals naturally increafes
with the increafe of wealth, fo their value diminifhes as their quan-
tity increafes, may, befides, difpofe many people to believe that
their value {till continues to fall in the European market; and the
{till gradually increafing price of many parts of the rude produce of
land may, perhaps, confirm them ftill further in this opinion.

THar the increafe of the quantity of the precious metals in any
country, which arifes from the increafe of wealth, has no tendency
to diminifh their value, I have endeavoured to fhow already. Gold
and filver naturally refort toa rich countr =r the-fame reafon that
all forts of luxuries and curiofities refort t. ..; not becaufe they are
cheaper there than in poorer countrjes, but becaufe they are dearer,
or becaufe.a better price is given for them. It is the fuperiority-of
price which attracts them, and as foon as that fuperiority ceafes, they
neceffarily ceafe to go thither. |

Tr. you except corn and fuch other vegetables as are raifed’
altogether by human induftry, that all other forts of rude produce,
cattle, poultry, game‘of all kinds, the ufeful foffils and minerals of

4 the

THE WEALTH OF NATIONS,

the earth, &c. naturally grow dearer as the fociety advances in
wealth and improvement, I have endeavoured to fhow already.

Though fuch commodities, therefore, come to exchange for a greater

quantity of filver than before, it will not from thence follow that
filver has become really cheaper, or will purchafe lefs labour than
before, but that fuch commodities have become really dearer, or

will purchafe more labour than before. It is rot their nominal.

price only, but their real price which rifes in the vrogrefs of.

improvement, The rife of their nominal price is the ezeét, not of:
any degradation of the value of filver, but of the rife in their.

real price.

Different. Effects. of the Progrefi of Improvement upon three different:

}

Sorts of rude Produce.

6
HESE different forts of rude produce may be divided into:

three clafles. The firit compichends thofe which it is fcarce
in the power of human induiliy to multiply at all. The fecond,
thofe which it can multiply in proportion to the demand. The
third, thofe in which the efficacy of induftry is either limited or

uncertain. In the progrefs of wealth and improvement, the real.

price of the firft may rife to any degree of extravagance, and feems not

to be limited by any certain boundary. ‘That of the fecond, though.

it may rife greatly, has, however, a certain boundary beyond which it

cannot well pafs for any confiderable time together. That of the third, .
though its natural tendency is to rife in the progrefs of improve--
ment, yet in the fame degree of improvement it may fometimes |

happen even to fall, fometimes to continue the fame, and fome-
times to rife more or lefs, according as different accidents .. render

the efforts of human induftry, in multiplying this fort of rude.

produce, more or lefs fuccefsful. .

Firf

27%
CHAP.
ey

THE NATURE AND CAUSES OF

Firft Sort.

Tue firft fort of rude produce of which the price rifes in the
progrefs of improvement, is that which it is fcarce in the power of
human induftry to multiply at all. It confifts in thofe things
which nature produces only in certain quantities, and which being
of a very perifhable nature, it is impoffible to accumulate together
the produce of many different feafons. Such are the greater part
of rare and fingular birds and fifhes, many different forts of game,
almoft all wild-fowl, all birds of paffage in particular, as well as
many other things. When wealth, and the luxury which accom-
panies it, increafe, the demand for thefe is likely to increafe with
them, and no effort of human induftry may be able to increafe the
fupply much beyond what it was before this increafe of the demand.
The quantity of fuch commodities, therefore, remaining the fame,
or nearly the fame, while the competition to purchafe them is con-
tinually increafing, their price may rife to any degree of extrava-
gance, and feems not to be limited by any certain boundary. If
woodcocks fhould become fo fafhionable as to fell for twenty guineas
a-picce, no effort of human induftry could increafe the number of
thofe brought to market, much beyond what it is at prefent.
The high price paid by the Romans, in the time of their greateft
grandeur, for rare birds and fiflies, may in this manner eafily be
accounted for. Thefe prices were not the effects of the low value
of filver in thofe times, but of the high value of fuch rarities and
curiofities as human induftry could not multiply at pleafure. The
real value of filver was higher at Rome, for fome time before and
after the fall of the republic, than it is through the greater part
of Europe at prefent. ‘Three feftertii, ¢qual to about fixpence
fterling, was the price which the republic. paid for the modius
or peck of the tithe wheat of Sicily, This price, however,
7 was

the
of

ngs
Ping
her
part
me,
l as
om-
with
the
and.
ame,
con-
ava-
If
ineas
er of
fent.
atett
ly be
value
3.and
The
> and
part
pence
odius
yever,
was

THE WEALTH OF NATIONS,

was probably below the average market price, the obligation to
deliver their wheat at this rate being confidered as a tax upon the
Sicilian farmers. When the Romans, therefore, had occafion to
order more corn than the tithe of wheat amounted to, they were
bound by capitulation to pay for the furplus at the rate of four
feftertii, or eight-pence fterling the peck; and this had probably
been reckoned the moderate and reafonable, that is, the ordinary
or average contra¢t price of thofe times ; it is equal to about one and
twenty fhillings the quarter. Eight and twenty fhillings the quarter
was, before the late years of fcarcity, the ordinary contract price
of Englifh wheat, which in quality is inferior to the Sicilian, and
generally fells for a lower price in the European market. The
value of filver, therefore, in thofe antient times, muft have been
to its value in the prefent, as three to four inverfely, that is, three
ounces of filver would then have purchafed the fame quantity of
labour and commodities which four ounces will do at prefent.
When we read in Pliny, therefore, that Seius bought a white
nightingale, as a prefent for the emprefs Agrippina, at the price of
fix thoufand feftertii, equal to about fifty pounds of our prefent
money; and that Afinius Celer purchafed a furmullet at the price
of eight thoufand feftertii, equal to about fixty-fix pounds thirteen
fhillings and four-pence of our prefent money, the extravagance
of thofe prices, how much foever it may furprife us, is apt, not-
withftanding, to appear to us about one-third lefs than it really
was, Their real price, the quantity of labour and fubfiftence which
was given away for them, was about one-third more than their

nominal price is apt to exprefs to us in the prefent times. Seius

gave for the nightingale the command of a quantity of labour and
fubliftence, equal to what 661. 13s. 4d. would purchafe in the

_prefent times ; and Afinius Celer gave for the furmullet the com-

mand of a quantity equal to what 881, 17s. 94d. would purchafe.
What oceafioned the extravagance of thofe high prices was, not fo
Vou. I. Nn much

273
CHAP.
XI.
Keer yomaeey)

BOOK guch the abundance of ‘filver, as the abundance of labour and
wae fubfiftence,’ of ' which thofe Romans had the difpofal, beyond what

THE ‘NATURE AND CAUSES OF

was neceflary: for their own ufe. The quantity of filver, of which
they lhad:the difpofal,''was agood deal lefs than what the command
of the fame quantity of fabour and fubfiftence would have procured
to them in the prefent' times.

, Second Sort.
v Tine fecond fortof rude. produce of which the price rifes in the
progrefsiof improvement, is that which human induftry can mul-
tiply: ind proportionto: the demand,. It confifts in thofe ufeful
plants and animals. which,. in uncultivated countries, nature pro-
duces with fuch,profufe abundance, that they are of little or no
value,.and, which;,as cultivation. advances, are therefore forced to
give place to, fome.more. profitable produce. During a long period
in the progrefs of improvement, the quantity of thefe is continually
diminishing, while at the fame time the demand for them is continu-
ally increafing.,, Their.real value, therefore, the real quantity of la~
bour which they will purchafe or command, gradually rifes, till at laft
it,gets fo high. as. to render them.as profitable a produce as. any
thing elfe which human induftry can raife upon the moft fertile
and. beft cultivated land. When it has got fo high it cannot well

go higher. If it did, more land and more induftry would foon be.

employed to increafe their quantity.

WuEeEn the price of cattle, for example, rifes fo high that it is
as profitable to cultivate land in order to raife food for them, as in
order to raife food for man, it cannot well gohigher. If it did, more
corn land would foon be turned into pafture. The extenfion of
‘tillage, ‘by diminifhing the quantity of wild pafture, diminithes the
quantity of ‘butcher’s-meat which the country naturally produces
without labour or cultivation, and by increafing the number of
thofe

THE WEALTH OF NATIONS;

thofe who have either corn, or, ./;what.comes,.to othe fame
thing, the price of corn, to give in exchange for it, increafes the
demand, The price of butcher’s-meat,., therefore, and. confe-
quently of cattle, muft gradually rife till, it (gets;fo high that. it
becomes as profitable to employ the moft fertile, and beft cultivated
lands in raifing food for them as in raifing,corn, . But it mutt
always be late in the progrefs of improvement before tillage can
be fo far extended as to raife the price of cattle to this height; and
till it has got to this height, if the country is advancing at all, their
price muft be continually rifing. There are, perhaps, fome parts of
Europe in which the price of cattle has not yet gop.to this) height.
It had not got to this height in any part of Scotland, before. the
union. Had the Scotch cattle been always confined‘to the market
of Scotland, in a country in which the quantityiof' land; which
can be applied to no other purpofe but the feeding of cattle, is: fo
great. in proportion to what can be applied to’ other! purpofes, it is
{carce poffible, perhaps, that their price could evei: have; rifen fo
high as to render it profitable to cultivate land’ for the: fake of ‘feed-
ing them. In England, the price of cattle, it has‘'already been
obferved, feems, in the neighbourhood of London, to’ have got
to-this height about the beginning of the laft century; but'it:was
much later probably before it got to it through the greater part of
the remoter counties; in fome of which, perhaps, it may {catce
yet have got to it. Ofall the different fisbftances, howeyer,. which
compofe this fecond fort of rude produce. cattle is, perhaps,, that
of which the price, in the progrefs of improvement, rifes firft to
this height.

Tix. the price of cattle, indeed, has got to this height, it feems
{carce poffible that the greater part, even of thofe lands which are
capable of the higheft cultivation, can. be -completely cultivated.
In all farms too diftant from any town to carry manure from it,
Nn2 that

275
CHAR.

THE NATURE AND CAUSES OF

BOOK that is, in the far greater part of thofe of every extenfive country,
yam the quantity of well-cultivated land muft be in proportion to the

quantity of manure which the farm itfelf produces; and this again
muft be in proportion to the ftock of cattle which are maintained
upon it. The land is manured either by pafturing the cattle upon
it, or by feeding them in the ftable, and from thence carryimg out
their dung to it. But untefs the price of the cattle be fufficient to
pay both the rent and profit of cultivated land, the farmer cannot
afford to pafture them upon it; and he can fill lefs afford to feed:
them in the ftable. It is with the produce of improved and.
cultivated land only, that cattle can be fed im the ftable; be-
caufe to collect the fcanty and fcattered produce of wafte and un-
improved lands would require too much labour and: be too ex-
penfive. If the price of the cattle, therefore, is not fufficient to.
pay for the produce of improved and cultivated land, when they.
are allowed to pafture it, that price will be ftill lefs. fufficient to.
pay for that produce when it muft be ‘collected with a good deal:
of additional labour, and brought into the ftable to them. In thefe-
circumftances, therefore, no more‘cattle can, with profit, be fed in.
the ftable than what are neceffary for tillage. But thefe can never
afford manure enough for keeping conftantly in good condition,,
all the lands which they are capable of cultivating. What they
afford being-infufficient for the whole farm, will natorally be re-.
ferved for the lands to. which it can be moft advantageoufly or
conveniently applied; the moft fertile, or thofe, perhaps, in the
neighbourhood of the farm-yard. Thefe, therefore, will be kept
conftantly in good condition and fit for tillage. The reft will,
the greater part of them, be allowed to lie wafte, producing:
{carce any thing but fume miferable pafture,. juft fufficient to keep.
alive a few ftrageling, half-ftarved cattle; the farm, though:much
underftocked in proportion to what would-be neceflary for its com-
plete cultivation, being very frequently. overftocked in proportion ta.

4 its

THE WEALTH OF) NATIONS}

its actual produce, A portion of this wafte land, however, after
having been paftured in this wretched manner. for fix or {even year's
together, may be ploughed up, when it will yield, perhaps, a
poor crop or two of bad oats, or of fome other coarfe grain;: and
then, being entirely exhaufted, it muft be refted.and paftured again
as before, and another portion ploughed up: to be in the fame
manner exhaufted and refted again in its turn. Such accordingly
was the general fyftem of management all’over'the low country of
Scotland: before the union.. The lands which’ were'‘kept con-
ftantly well manured and in good condition,’ feldom | excecded'a
third or a fourth part of the whole farm, and fometimes) did not
amount to.a fifth or afixth part of it. The -reft were never ma

nured, but a certain portion of them was ‘im its tarn, notwith--
ftanding, regularly cultivated: and exhaufted.)) Under : this fyftem:

of management, it is evident, even that part. of the:lands of Scote
land which is capable of good cultivatian, could produce, but Jittle
in comparifon of what it may be capable of produeing.., But: how

difadvantageous foever this fyftem may appear, yet. before the union:
the low price of cattle feems to have rendered _ it almoft, unavoid--

able. If, notwithftanding a great rile in their price, it {till con.
tinues to prevail through a confiderable part of the country, it is

owing in many places, no doubt, to ignorance and attachment to:

old cuftoms, but in. moft places tothe unavoidable obftructions
which. the natural courfe of things oppofes to the immediate or

{peedy eftablifhment:of a better fyftem: firft, to the poverty of

the tenants, to their not: having yet had time to acquire a ftock of
cattle fufficient to-cultivate their lands more completely, the fame
rife of price which would ‘render it advantageous for them to maine

‘tain a greater ftock, rendering it’ more difficult: for them .teac-.
quire it; and, fecondly, to their not having.yet-had time to put:

their lands. in condition to maintain this greater ftock. properly,

fuppofing they. were capable of acquiring it. The. increafe of:
ene ftock.

377
OR HR
once

278

THE NATURE AND CAUSES OF

BOOK ftock and the improvement of land are two events which muft go
teey—— hand in hand, and of which the one can no where much out-run

the other. Without fome increafe of ftock, there can be f{carce any
iraprovement of land, but there can be no confiderable increafe
of ftock but in confequence of a confiderab’ improvement of
land; becaufe otherwife the land could not mainiain it. Thefe
natural obftrutions to the eftablifhment of a better fyftem, can.
not be removed but by a long courfe of frugality and induftry ; and
half a century or a century more, perhaps, muft pafs away before
the old fyftem, which is wearing out gradually, can be completely
abolifhed through all the different parts of the country. Of all
commercial advantages, however, which Scotland has derived from
the union with England, this rife in the price of cattle is, per-
haps, the greateft. It has not only raifed the value of all highland
eftates, but it has, perhaps, been the principal caufe of the im-
provement of the low country.

In all new colonies the great quantity of wafte land, which
can for many years be applied to no other purpofe but the feed-
‘ing of cattle, foon renders them extremely abundant, and in
every thing great cheapnefs is the neceflary confequence of great
abundance. ‘Though all the cattle of the European colonies in
America were originally carried from Europe, they foon multi-
plied fo much there, and became of fo little value, that even
horfes were allowed to run wild'in the woods without any owner
thinking it worth while to claim them. It muft be a long time
after the firft eftablifhment of fuch colonies before it can become
profitable to feed cattle upon the produce of cultivated land,
The fame caufes, therefore, the want of manure, and the dif-
proportion between the ftock employed in cultivation, and the
land which it is deftined to .cultivate, are likely to introduce there

a fyftem of hufbandry not unlike that which ftill continues to

7 take

THE WEALTH OF NATIONS,

take place in fo many parts of Scotland. Mr. Kalm, the Swedifh
traveller, when he gives an ac.ount of the hufbandry of fome
of the Englith colonies in North America, as he found it in 1749,
obferves, accordingly, that he can with difficulty difcover there
the character of the Englifh nation, fo well. fkilled in all the
different branches of agriculture. They make fcarce any manure
for their corn fields, he fays; but when one piece of ground has
been exhaufted by continual cropping, they clear and cultivate
another piece of frefh land; and when that is exhaufted; proceed
toathird. Their cattle are allowed to wander through the woods
and other uncultivated grounds, where they are half ftarved’;
having long ago extirpated almoft all the annual grafles by cropping
them too early in the fpring, before they had time to form their
flowers, or to fhed their feeds. The annual grafles were, it
feems, the beft natural graffes in that part of North America s.
and when the Europeans firft fettled there, they ufed to grow
very thick, and to rife three or four feet high. A piece of
ground’ which, when he wrote, could’ not maintain one cow,
would in former times, lie was affured, have maintained four,
each of which would have given four times the quantity of milk,

which that one was capable of giving. The poornefs of the.

pafture had, in his opinion, oceafioned the degradation of their.

cattle, which degenerated, fenfibly from one generation to another..

They were probably not. unlike that ftunted. breed. which was
common all oyer: Scotland thirty or forty years ago, and which is

now fo much mended through the.greater part of the low country,.
not fo much by a change of the breed, though that expedient has.
been employed in fome places, as by a more plentiful method of.

feeding them.

Tuouon it‘ is late, therefore, in the progrefs of improvement:
before cattle can bring fuch a.price as to. render it profitable to
cultivate :

279
CHAP,
a)

280

THE NATURE AND CAUSES OF

BOOK cultivate land for the fake of feeding them; yet of all the dif-
i-— ferent pafts which compofe this fecond fort of :rude produce, they

are perhaps the firft which bring this price; becaufe till they bring

it, it feems impoffble that improvement can be brought near

even to that degree of perfection to which it has arrived i im many
parts of Europe.

As cattle are among the firft, fo perhaps venifon is among the
laft parts of this fort of rude produce ~hich bring this price.
The price of venifon in Great Britain, how extravagant foever
it may appear, is not. near fufficient to compenfate the expence
of a deer park, as is well known to- all thofe who have had any

-experience in the feeding of deer. . If it was, otherwife, the feed-

ing of deer would foon become an article of common farming ;
in the fame manner as the feeding of thofe fmall birds called
Turdi was among the antient Romans. Varro and Columella
affure Wis tha: it was a moft profitable article, The fattening of
Ortolans, birds of paffage which arrive lean in the country, is
faid to be fo in fome parts of France. If venifon continues in
fathion, and the wealth and luxury of Great Britain increafe as
they have done for fome time paft, its price may very probably
rife ftill higher than it is at prefent.

BeTWEEN that period in the progrefs of improvement which
brings to its heiglit the price of fo neceffary an article as cattle,
and that which brings to it the price of fuch a fuperfluity as
venifon, there is a very long interval, in the courfe of which many
other forts of rude produce gradually arrive at their higheft
price, fome fooner and fome later, according-to different circum-
ftances.

Tuvus in every farm the offals of the barn and ftables will
maintain a certain number of poultry. Thefe, as they are fed
with

THE WEALTH OF NATIONS.

281

with what would otherwife be loft, are a meer fave-all; and as CHAP.
they coft ‘the farmer fcarce any thing, fo he can afford to fell —u—w7

them for very lite. Almoft all that he gets is pure gain, and
their price can {carce be fo low as to difcourage him from feed-
ing this number. But in countries ill cultivated, and, therefore,
but thinly inhabited, the poultry, which are thus raifed without
expence, are often fully fufficient to fupply the whole demand,
In this {tate of things, therefore, they are often as.cheap as
butcher’s-meat, or any other fort of animal food. But the whole
quantity of poultry, which the farm in this manner produces
without expence, muft always be much fmaller than the whole
quantity of butcher’s meat which is reared upon it; and in times
of wealth and luxury what is rare, with only nearly equal merit,
is always preferred to what is common. . As wealth and luxury
increafe, therefore, in confequence of improvement and culti-
vation, the price of poultry gradually rifes above that of butcher's
meat, till at Jaft it gets fo -high that it becomes profitable to cul-
tivate land for the fake of feeding them. When it has got to
this height, it cannot well go higher. If it did, more land would
foon be turned to this purpofe. In feveral provinces of France,
the feeding of. poultry is confidered. as a very important article
in rural economy, and fufficiently profitable to encourage the
farmer to raife‘a confiderable quantity of Indian corn and buck
wheat for this purpofe. A middling farmer will there fometimes
have four hundred fowls in his yard. The feeding of poultry
feems fcarce yet to be generally confidered as a matter of fo much
importance in England. They are certainly, however, dearer
in England than in France, as England receives confiderable fup-
plies from France. - In the progrefs of improvement, the period
at which every particular fort of animal food is deareft, muft na-
turali;; be that which immediately preceeds the general practice
of cultivating land for the fake of raifing it. For fome time

Vor. I. Oo ? before

THE NATURE AND CAUSES OF

BOOK before this praétice becomes general, the fcarcity muft neceffarily

wy—~_ raife the price. " After it has become general, new methods of
feeding are commonly fallen upon, which enable the farmer to
raife upon the fame quantity of ground a much greater quantity
of. that particular fort of animal food. The plenty not only.
obliges him to fell cheaper, but in confequence of: thefe improves.
ments he can afford to fell: cheaper; for if he could not. afford
it, the plenty would not be of: long continuance; It: has been
probably in this manner that the: introduction of clover, turnips,
carrots, cabbages, écc. has: contributed to: fink. the common price
of butcher’s-meat in the:London market fomewhat below what it.
was about the. beginning of the lafticentury,

Tue hog, that finds his food‘among ordire, and ‘greedily dévours:
many things rejected by every other ufeful animal, is, like poultry,
originally kept as a fave-all.. As long as the number ‘of ‘fuch ani-.
mals, which can thus be reared at little or no expence, is fully.
fufficient to fupply the demand, this fort. of butcher’s-meat comes.
to market at a much lower price than any other. But. when:
the demand rifes beyond what. this quantity can.fupply, when.
it. becomes neceffary, to raife food on. purpofe for feeding and:
fattening hogs, in the fame. manner. as for feeding and fatten-.
ing other cattle, the price neceffarily rifes, and becomes propor-
tionably either. higher or lower than that of other, butcher’s-meat,,
according, as the. nature of. the country, and. the ftate of ‘its.
agriculture, happen. to render. the feeding of hogs ‘more or lefs.
expenfive. than. that of other. cattle, In France, according to:
Mr. Buffon, the price of. pork is nearly equal to that of: ©
beef. In moft parts of Great Britain it. is at prefent fomewhat:
higher.

THE

THE WEALTH OF NATIONS. 283

t
arly _ c@ great rife in the price. both of hogs and poultry has in CHAP.
B of Great Britain, been frequently imputed to the diminution of the —\—
to number of ccttagers and: other {mall occupiers of land; an event
ity which has in every part: of Europe been the immediate fore-runner
pnily. of improvement and better cultivation, but which at the fame
DVEs. time may. have contributed to raife the price of thofe articles, both
tord fomewhat ‘fooner and fomewhat fafter than it would otherwife have
pen rifen, As ‘the pooreft family can often maintain a cat or a dog,
Mss without any expence; fo the pooreft occupiers of land can commonly
pre maintain a few poultry, or a fow and a few pigs, at very little. - The
At it. little offals of their own table, their whey, fkimmed milk, and

butter-milk, fupply thofe animals with a part of their food, and they
find the reft in the neighbouring fields without doing any fenfible
damage to any body. By diminifhing the number of thofe {mall

ours:
Itry, occupiers, therefore, the quantity of this fort of provifions which
ant. is thus produced at; little or no expence, muft certainly have been

ally. a good deal diminifhed, and their price muft confequently have
; been raiféd both fooner and.fafter than it would otherwife have

ag rifen. Sooner or later, however, in the progrefs of improvement,
hes. it muft at any rate have rifen to the utmoft height to which it js
capable of rifing; or to the price which pays the labour and
and ;

heii? expence’ of cultivating the Idnd which furnifhes them with food
put as well’as thefe are paid upon the greater part of other cultivated
po . land.
leat, |

its. | , |
les. Tue bufinefs of the dairy, like the feeding of hogs and poultry,
én is Originally carried on as a fave-all. The cattle neceffarily kept
of: upon the farm, produce more milk than either the rearing of their
vhat own young, or the confumption of the farmer’s family requires;

and: they produce moft at one particular feafon. But, of all the
produétions of land, milk is perhaps the moft perithable, In
the warm feafon, when it is moft.abundant, it-will fcarce keep
rag O02 four

THE NATURE AND’ CAUSES OF

‘BOOK four and twenty hours, The farmer, by making it into freth
wy butter, ftores a fall part of it for a week: by making it into
falt butter, fora year: and by making it into cheefe, he ftores
a much greater part of it for feveral years. Part of all thefe is
referved for the ufe of his own family. The reft goes to market,
-in order to find the beft price which is to be had, and which can
fcarce be folow as to difcourage him from fending thither what-
ever is over and above the ufe of his own family. If it is very
low, indeed, he will be likely to manage his dairy in a very flovenly
and dirty manner, and will fcarce perhaps think it worth while
to have a particular room or building on purpofe for it, but
will fuffer the bufinefs to be carried on amidft the {moke, filth,
and naftinefs of his own kitchen; as was the cafe of almoft.
all the farmers dairies in Scotland thirty or forty years ago, and
as is the cafe of many of them ftill. The fame caufes which
gradually raife the price of butcher’s-meat, the increafe of the
demand, and, in confequence of the improvement of the country,
the diminution of the quantity which can be fed at little or no
expence, raife, in the fame manner, that of the produce of the
dairy, of which the price naturally connects with that of butcher’s-
meat, or with the expence of feeding cattle. The increafe of
ptice pays for more labour, care, and cleanlinefs, The dairy be-
comes more worthy of.the farmer's attention, and the quality of its
produce gradually improves, The price at laft gets fo high that it
becomes worth while to employ fome of the moft fertile and beft
cultivated lands in feeding cattle merely for the purpofe of the dairy ;
and when it has got to this height, it cannot well go higher. If it
did, more land would foom-be'turned to this purpofe. It feems to
have got to this height through the greater part of England,
where much good land is commonly employed in this manner.
If you except the neighbourhood of a few confiderable towns,
it feems not yet to have got to this height any where in Scotland,
where

‘THE WEALTH. OF NATIONS,

285

where common farmers feldom employ much good land in raifing CHAP.
food for, cattle merely for the purpofe of the dairy. The price —-—~

of the produce, though it has rifen very confiderably within —

thefe: few years, is. probably ftill.too low to admit of it. The
inferiority of the quality, indeed, compared with -that of the
produce of Englith dairies, is fully equal to that of the price,
But this inferiority of quality is, perhaps, rather the effect of this
lownels of price than the caufe of it: ‘Though the quality was
much better, the greater part of what is brought to market
could not, I apprehend, in the prefent circumftances of the
country, be difpofed of at a much better prices and the prefent
price, it is probable, would not pay the expence of the land.
and labour neceflary for producing a much better quality. Through
the greater part of England, notwithftanding the fuperiority of

price, the dairy is not reckoned a more profitable employment

of land than the raifing of corn, or the fattening of cattle, the
two great objects of agriculture. Through the greater part of
Scotland, therefore, it cannot yet be equally profitable.

Tue lands of no country, it is evident, can ever be compleatly
cultivated and. improved, till once the price of every produce, which
human induftry is obliged to raife upon them, has got fo high as
to pay for the expence of compleat improvement and cultivation.
In order to do this, the price of each particular produce muft be
fufficient, firft, to pay the rent of good corn land, as it is that
which regulates the rent: of the greater part of other cultivated
land ; and, fecondly, to pay the labour and expence of the farmer.
as well as they are commonly paid upon good corn land ; or,: in
other words, to replace with the ordinary profits the ftock which
he employs about it. This rife in the price of each particular
produce, muft evidently be previous to the improventent and culti-
vation of the land which is deftined for raifing it. Gain is the

end

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THE NATURE?) AND’ CAUSES OF

®OOK end of all improvement, and nothing could deferve that name’ of
toy «which lofs was to be the neceflary :confequence. : But lofs muft be

the neceflary:confequence of improving land for the fake of: a ‘pro.
sduce of which the: price could never \ bring back the:expence.'. If
tthe compleat improvement and cultivation of the. country be, as
it moft certainly is, the greateft of all publick advantages, this rife
dn the price: of all thofe different fortsiof rude produce, inftead. of
deing confidered: as a publick calamity; ought to be regarded as
the neceflary fore-runner and attendant of the greateft of all prenk
advantages.

“Tuts rife too in the nominal or ‘money ‘price of all thofe different
forts of rude:produce has been the effect, not of any degradation
4n the value of filver, but of a ‘rife in their real price. They have
‘become worth, not only a greater quantity of filver, but a greater
‘quantity of labour and fubfiftence-than) before. | As it ‘cofts a
greater quantity of labour and fubfiftence' to bring them to market,
fo when they are'brought ‘thither, they reprefent’or' are equivalent
to a greater quantity.

4 Third Sort.

_ ‘Yue third and lat. fort of, rude produce, of which the: price
naturally rifes-in the progrefs of improvement, is that in which the
efficacy of human induftry, in augmenting the quantity, is either
limited or uncertain. Though the'real. price of ‘this fort» of rude
produce, therefore, naturally tends to.rife in the progrefs .of 'im-
provement, yet, according,.as different. accidents ‘happen: to! render
the efforts of human induftry,more or lefs fuccefsful in augment-
ing the quantity, it may happen fometimes even: to fall; fometimes
to continue the fame in very different periods of improvement, and
fometimes to rife more or lefs in the fanie. period.

THERE

ERE

THE WEALTH OF NATIONS:

283

Tuere are fome. forts of rude produce which nature has ren- € BA P,
dered a kind of appendages to other forts; fo that the quantity: of —\—~

the one which any country can afford, is neceflarily limited by that
of the other. The quantity of wool or of raw hides, for example,
which any country can afford, is neceffarily limited by the number
of great and fmall.-cattle that are kept in it. The ftate of its
improvement and the nature. of its, agriculture, , again neceffarily
determine this number., -

Tue fame caufes, which in the progrefs of improvement, gra>
dually raife the price of butcher’s+meat, fhould: have the fame
effect, it may be thought, upon the prices of wool and:raw: hides,
and ‘raife them ‘too. nearly in the fame proportion. It: probably
would be fo, if in the rude: beginnings of improvement the market

for the latter commodities was confined within as narrow bounds as.
that: for the-former. But the extent: of their svuaesalh markets is:

commonly: extreanily different.

Tue market for butcher’s-meat is almoft every where confined '

40 the country which produces it. Ireland, and fome part’ of.

Britith America indeed, carry’on a confiderable tradé in falt pros
vifions ; but they are, I believe, tlie only countries in the com~

mercial world which do fo, or which export to other countries any:

confiderable part-of their butcher’s-meat..

Tue: market for wool and raw. hidés, on the contrary, is im

the rude beginnings of improvement very feldom confined to the:
country, which produces them. , They can. eafily be. tranfported to:
diftant countries, wool without any preparation, . and’ raw. hides:

with very little;. and as they are the materials of many manufac

tures, the induftry of other countries may occafion a demand for:

4. them,,

288 THE. NATURE AND CAUSES OF

B oo K them, though that of the country which produces them might
——~ not occafion any.

Ix countries iil cultivated, and therefore but thinly Inhabited,
the price of the wool and the hide bears always a much greater
proportion to that of the whole beaft, than in countries where,
improvement and population being further advanced, there is more
demand for butcher’s-meat. Mr. Hume obferves, that in the
Saxon times, the fleece was eftimated at two-fifths of the value
of the whole fheep, and that this was much above the proportion
of its prefent eftimation. In fome provinces of Spain, I have
been affured, the theep is frequently. killed merely for the fake of
the fleece and the tallow. The carcafe is often left to rot upon
the ground,.or to be devoured by beafts and birds of prey. If
this fometimes happens even in Spain, it happens almoft conftantly
in Chili, at Buenos Ayres, and in many other parts of Spanith
America, where the horned cattle are almoft conftantly killed
merely for the fake of the hide and the tallow. This too ufed to
happen almoft conftantly in Hifpaniola, while it was infefted by
the Buccaneers, and before the fettlement, improvement and popu-
loufnels of the French plantations (which now extend round the
coaft of almoft the whole weftern half of the ifland) had given
fome value to the cattle of the Spaniards, who ftill continue to
poffefs, not only the eaftern part of the coaft, but the whole inland
and mountainous part of the country.

Tuovex in the progrefs of {improvement and, population, the
price of the whole | beaft neceffarily rifes, yet the price of the carcafe
is likely ‘to, be much _ more affected by. this rife than ‘that ‘of the
wool and the hide. The market for the -carcale, being i in the rude
ftate of fociety confined always to the country which produces it,
muft neceffarily be extended in proportion to the improvement
7 and

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THE WEALTH OF NATIONS.

289

and population of that country. But the market for thewooland CHAP.
the hides even of a barbarous country often extending to the whole w=+y—~

commercial world, it can very feldom be enlarged in the fame
proportion. The ftate of the whole commercial world can feldom
be much affected by the improvement of any particular country ;
and the market for fuch commodities may remain the fame or very
nearly the fame, after fuch improvements, as before. It fhould
however in the natural courfe of things rather upon the whole be
fomewhat extended in confequence of them. If the manufactures,
efpecially, of which thofe commodities are the materials, thould
ever come to flourifh in the country, the market, though it might
not be much enlarged, would at leaft be brought much nearer to
the place of growth than before ; and the price of thofe materials
might at leaft be increafed by what had ufually been the expence
of tranfporting them to diftant countries, Though it might not
rife therefore in the fame proportion as that of butcher’s-meat, it
ought naturally to rife fomewhat, and it ought certainly not to
fall.

In England, however, notwithftanding the flourifhing ftate of
its woollen manufacture, the price of Englifh wool has fallen very
confiderably fince the time of Edward HI. There are many
authentick records which demonftrate that during the reign of that
prince (towards the middle of the fourteenth century, or about
1339) what was reckoned the moderate and reafonable price of the
tod or twenty-eight pounds of Englifh wool was not lefs than ten
fhillings of the money of thofe times *, containing, at the rate of
twenty-pence the ounce, fix ounces of filver Tower-weight, equal
to about thirty fhillings of our prefent money. In the prefent
times, one and twenty fhillings the tod may be reckoned a good

Vou. I. Pp price

* See Smith’s Memoirs of Wool,

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THE NATURE AND CAUSES OF

BQOR price for very good Englifh wool Thre money-pric¢ of wool,
teary) therefore, in the time of Bdward Lil, was to its mroney-pricé in the

prefent times as ten to feven. The fuperiority of ‘its real price was
fill greater. At the rate of fix fhillings and eight-pence the quar.
ter, ‘ten fhillings was in thofe ancient times the price of twelve
buthels of wheat. At the rate of twenty-eight thillings the quarter,
one ahd twenty fhillings ‘is in the prefent times the ‘price of fix
buthels only. The proportion ‘between the real prices of ancient
and modern times, therefore, is as twelve to fix, or as two to one,
Jn thofe ancient times‘a tod of wool would ‘have purchafed twice
the quantity of fubfiftence which it will purchafe at prefent; and
cdrifequently twice ‘the quantity of labour, if the real recompence
of labour had been the fame in both periods,

Tus degradation both in the real and nominal value of wool
could never have happened in confequence of the natural courfe of
things. It has accordingly been the effect of violence and artifice :
Firft, of the abfolute prohibition of exporting wool from Eng-
land; Secondly, of the permiffion of importing it from all othe"
countiies duty free; Thirdly, of the prohibition of exporting it
from Ireland to any other country but England. In confequence
of thefe regulations,. the market for Englifh wool, inftead of
being fomewhat extended in confequence of the improvement of
England, thas been confined to the home market, where the wool
of all other countries is allowed to come into competition with
it, and where that of Ireland is forced into competition with it,
As the woollen manufactures too of Ireland are fully as much dif-
‘couraged as is confiftent with juftice and fair dealing, the: Irith
can work up but a fmall part of their own wool at home, and
are, therefore, obliged to fend a greater proportion of it to Great
Britain, the only market they are allowed.

I Have

[AVE

THE WEALTH OF NATIONS.

39k

I wave not been able to find any fuch authentick records con- CHAP,
cerning the price of raw hides in ancient times. Wool was com- xe. BP

monly paid as a fubfidy to the king, and its valuation in that fubfidy
afcertains, at leaft in fome degree, what was its ordinary price,
But this feems not to have been the cafe with raw hides.. Fleet-
wood, however, from an account in 1425, between the prior of
Burcefter Oxford and one of his canons, gives us their price, at
leaft as it was ftated, upon that particular accafion: viz. five ox
hides at twelve fhillings; five cow hides at feven fhillings and
three-pence ; thirty-fix fheeps {kins of two years old at nine fhil-
lings ; fixteen calves fkins at two fhillings. In 14a5, twelve hhily
lings contained about the fame quantity of filver as four and twenty
fhillings of our prefent money. An ox hide, therefore, was in
this account valued at the fame quantity of filver as 4s. tths
of our prefent money. Its nominal price was a good deal lower
than at prefent. But at the rate of fix fhillings and. eight-pence
the quarter, twelve fhillings would in thofe times have purchafed
fourteen bufhels and four-fifths of a buthel of whegt, which, at
three and fix-pence the bufhel, would in the prefent times coft
51s. 4d. An ox hide, therefore, would in thofe times haye
purchafed as much corn as ten fhillings and three-pence: would
purchafe at prefent. Its real value was equal to ten fhillings
and three-pence of our prefent money. In thofe ancient times,
when the cattle were half ftarved during the greater part of the
winter, we cannot fuppok that they were of a very large fize. An
ox hide which weighs four ftone of .fixteen pounds averdupois, is
not in the prefent nies reckoned a bad one; and in thofe ancient
times would probably have .been reckgned a yery good ene, But
at half a crown the ftone, whith at this moment (February, 1773)
I underftand to be the common price, fuch a hide would at prefent
coft only ten fhillings. Thengh its nominal price, therefore, js
higher in the prefent , than jt wasin thofe ancient times, its real

Ppa2 price,

492 THEO NATOREO AND | CAUGCES' (OF

BOQK price, the’ real duunvity of fubfiftence which it, will: purchale: or

uve command; is rather 'fomewhat lower. The price of cow hides, as
ftated inthe above account, is nearly in the common proporbor to
that'of ox hidesi ‘That°of theep fkins is a good deat above it,
They had'probably been fold with the wool, That of calves ikins)
on the contrary, is greatly below it. In countries where the
price of cattle is very low, the calves, which are not intended to be
reared in order ‘to keep up the ftock, are generally ‘killed very
young’; as was’ the cafe in’ Scotland twenty or thirty years' ago.
It faves the milk, which their price would not pay for. Their fkins,
therefore, ‘are commonly good for little,

Tue price of raw hides is a good deal lower at prefent
than it was a few years ago; owing probably to the taking off
the duty upon feal fkins, and to,the allowing, for a limited time,
the importation of raw hides from Ireland and from the plantations
duty free, which was done in 1769. Take the whole, of the
prefent century at an average, their real price has probably been
fomewhat higher than it was, in thofe. ancient times., -The nature
of the commodity renders it. not quite fo proper for being tran-
fported to diftant. markets as wool. It fuffers more by keeping,
A falted hide is reckoned inferior to.a frefh one, and fells for a
lower price. This circumftance, muft neceflarily have fome ten-
dency to fink the price of raw hides. produced in a, country, which
does not manufacture them, but is obliged to export them ;: and
comparatively to raife that of thofe produced in a country which
does manufacture them, It_muft haye fome tendency to fink their
price in.a barbarous, and to, raife.it in aa improved )and manu-
facturing country. It muft have had {eine terccncy thereiore to.
fink it in ancient, and to raife it-in modern times. Our tanners
befides have not been quite: fo fuiccefsful as our clothiers in con-
vincing the wifdom of the nation that the fafety of the common-.

wealth |

—_> ~~ we Ot GC

— —_- —_ ean od tts © OC oe Ue

THES WRSLTH, OF) NATIONS,:

293

wealth depends upon the prosperity of their particular manufactuse, CHA P.

They-have accordingly bee» much lefa, favoured. . The exportation
of raw hides has, indeed, been prohibited, and declared a nui~
fance;, (but their importation from foreign countries has. been
Subjected to,a duty; and though this duty has been taken off from
thofe of Ireland and the plantations (for che limited time of five
years only) yet. Ireland has not. been confined to the market of
Great Britain for the fale of its furplus hides, ov of thofe which are
not. manufactured at.home. The hides.of common. cattle have
but within, thefe few years been put,among the enumerated commos
dities which the plantations can fend nowhere but to the mother
country; neither has the commerce of Ireland been in this cafe
oppreffed hitherto in order to fupport the manufactures of, Great
Britain.

‘\WHatTever. regulations tend to fink the price either of ‘wool
or of raw’ hides below what: it ‘naturally would be, muft; in an
improved and cultivated country, have'fome tendency to raife the.
piice of butcher’s- meat. ‘The price both of the great anid final
cattle, which are fed on improved’ and cultivated land, muft

fuifficiént to pay the rent which the landlord, and the profit which
the°farmer has reafon to expect from improved’ and ‘cultivated
laitd. “If itis not, they will foon-ceafe' to’ feed them. ° Whatever
part of’ this price, therefore, is not paid by the wool and the hide,
mutt be paid by the carcafe. The lefs.there is paid for the one,
the ‘more mutt be paid for the.other. In what manner this price
is to be divided upon.the different. parts of the: beaft, is indifferent

to the landlords and farmers, provided it is all’paid to them. In.
an improved and cultivated country, therefore, their intereft as.

landlords and farmers cannot be.much affected by fuch’ regula-

tions, though their intereft as confumers may, by the ‘rife in the -
price of provifions, It would be quite otherwife, however, im an .
4, unimproved :

XI.
aay

494

THE NATURE AND CAUSES OF

BOOK unimproved and uncultivated country, where the’ greater part of
wy—w the lands could be applied to no other purpofe but the feeding of

cattle, and where the wool and the hide made the principal part of
the value of thofe cattle. Their intereft as landlords and farmers
would in this cafe be very deeply affected by fuch regulations, and
their intereft as confumers very little. The fall in the price of the
wool and the hide, would not in this cafe raife the price of the
carcafe; becaufe the greater part of the lands of the country being
applicable to no other purpofe but the feeding of cattle, the fame
number would ftil! continue to be fed. The fame quantity of
butcher’s-meat would ftill come to market. The demand for it
would be no greater than before. Its price, therefore, would be
the fame as before. The whole price of cattle would fall, and
along with it both the rent and the profit of all thofe lands of which
cattle was the principal produce, that is, of the greater part of the
lands of the country. The perpetual prohibition of the exportation
of wool which is commonly, but very falfely, afcribed to Edward
III, would, in the then circumftances of the country, nave been

the moft deftructive regulation which could well have been thought
of. It would not only have reduced the actual value of the greater
part of the lands of the kingdom, but by reducing the price of the
moft important fpecies of {mall cattle, it would have retarded very
much its fubfequent improvement.

Tue wool of Scotland fell very confiderably in its price in con-
fequence of the union with England, by which it was excluded from
the great ‘market of Europe, and confined to the narrow one of
Great Britain, The value of the greater part of the lands in the
fouthern counties of Scotland, which are chiefly a ‘fheep country,
would have been very deeply affected by this event, had not the
rife in the price of butcher’s-meat fully compenfated the fall in the
price of wool, | ?

¥ As

t of
¢ of
it of
mers
and
f the
F the
being
fame
ty of
or it
Id be
and
vhich
f the
ation
lward
been
ought
reater
of the
| very

con-
from
ne of
n the
ntry,
ot the
n the

‘THE WEALTH OF NATIONS,

_. As the efficacy of human induftry, in increafing .the quantity
either of wool.or of raw hides, is limited, fo far as it depends upon
the produce of the country where it isexerted ; fo itis uncertain fo
far as it depends upon the produce of other countries, It fo far
depends, not fo much upon the quantity which they produce, as
upon that which they do not manufacture ; and upon the reftraints
which they may or may not. think proper to impofe upon the ex-
portation of this fort of rude produce, Thefe circumftances, as
they are altogether independent of domeftick induftry, fo they
neceffarily render the efficacy of its efforts more or lefs uncertain.
In multiplying this fort of rude produce, therefore, the efficacy of
human induftry is not only limited, but uncertain.

In multiplying another very important fort of rude produce,
the quantity of fifth that is brought to market, it is likewife both
limited and uncertain. It is Jimited by the local fituation of the
country, by the proximity or diftance of its different provinces
from the fea, by the number of its lakes and rivers, and by what
may be called the fertility or barrennefs of thofe feas, lakes and
vivers, as to this fort of rude produce. As population increafes, as
the annual produce of the land and labour of the country grows
greater and greater, there come to be more buyers of fifth, and
thofe buyers too have a greater quantity and variety of other goods,
or, what is the fame thing, the price of a greater quantity and
variety of other goods, to buy with. But it will generally be im-
poffible to fupply the great and extended market without employing a
quantity of labour greater than in proportion to what had been re-
quifite for fupplying the narrow and confined one. A market which,
from requiring only one thoufand, comes to require annually ten
thoufand tun of fith, can feldom be fupplied without employing
more than ten times the quantity of Jabour which had before been
fufficient to fupply it. The fith muft generally be ‘fought for at a

greater

295
CHAP,
Xi.

Se a dimmed

296

THE NATURE AND CAUSES OF

B oo K greater diftance, ‘larger veflels muft ve employed, and more: ex.
‘<———~_ penfive machinery of every’ kind ‘made ufe of, The ‘real price

-of this commodity, therefore, naturally rifes in the progrefs of

improvement. It has accordingly done fo, I believe, more or lefe
an every country,

‘Trovcs the fuccefs of a particular day’s fifhing may be a very
‘uncertain matter, yet, the local fituation ‘of the country’ being
fuppofed, the general efficacy of ‘induftry in bringing a certain
quantity of fifth to market, taking thé courfe of’a’year, or of
feveral years together, it may perhaps be thought, is certain
enough ; and it, no doubt, is fo. As it depends more, however,
upon the local fituation of the country, than upon the ftate of
its wealth and induftry; as upon this account it may in different
countries be the fame in very different periods of improvement,
and very different in the fame period; its connection with the ftate
of improvement is uncertain, and it is of this fort of uncertainty
that Iam here fpeaking. |

In increafing the quantity of the different minerals and metals
which are drawn from the bowels of the earth, that of the more
precious ones particularly, the efficacy of human induftry feems
not to be limited, but to be altogether uncertain.

Tue quantity of the precious metals which is to be found in
any country is not limited by any thing in its local fituation, fuch
as the fertility or barrennefs of its own mines, Thofe metals
frequently abound in countries which poffefs no mines. _ Their
quantity in every particular country feems to depend upon two dif-
ferent circumftances; firft, upon its power of purchafing, upon the
ftate of its induftry, upon the annual produce of its land and la-
bour, in confequence of which it can afford to employ a greater

THE, WEALTH OF NATIONS, 297

i: wy or. a fmaller quantity. of labour, and. fubliftence.i in ‘bnaing, or C: AP.

price purchafing | fach fuperfluities as gold and: filver, either from: its:owa fos i
& of mines or from thofe of other countriess:and, {econdly, upon the f
lets fertility, or. barrennefs of the mines:.which. may happen iat any
“ particular ‘time’ to fupply the commercial world with: thofe metals.
The quantity of thofe metals in the countries moft remote from
very the mines, muft be more or lets affected by this fertility or barren-
being nefs, on account of the eafy and cheap tranfportation of . thofe
tain metals, of their.:fmall bulk and great value, Their, quantity in
or of China,and,Indoftan muft haye been more or ihn affected. by. the
ait ayaa of.the mines of America.
ever,
te of ; So far as ; their quantity in any. particular country depends upon
ferent the former of thofe two circumftances (the power of purchafing)
ment, their real price,: like that of all other luxuries and, fuperfluities, is
» tate likely to rife with the wealth and improvement of the country, and q
tainty to fall with its poverty and depreffion. Countries which have a
great quantity of labour and fubfiftence to fpare, can afford to |
3 purchafe any ‘particular quantity of thofe metals at the expence of i"
netals 4.greater quantity of labour and fubfiftence, than countries which
more have lefs to fpare.
feems bts : :
$e faras their quantity in any particular country: depends upon
the latter of thofe two circumftances (the fertility or barrennefs of
d in the. mines which happen to fupply the commercial world) their
fuch ‘real price, the real quantity of fabour and fubfiftencé which ‘they
tals will purchafe or exchange for, will, no doubt, fink more or lefs
The in proportion to the fertility, and rife in proportion’ to the barreri-
o dif- riefs of thofe mines.
on the
wheal Tue fertility or barrennefs of the mines, however, which may
_— happen at any particular time to fupply the commercial world,

Vor. I. Q4q ; is

298

THES NATURES AND. CAUSES [OF

BOOK isa ¢irelimftance which;' it ‘is ‘evident, “may*have ino fortdf boom
enya nection with the ftate of induftry in a particularicountry: > It feds

even'to ‘have’ no'very’neceflary conne¢tion with thateof the world
in general,» As'arts' and commerce, indeed, ‘gradually’ fpread
themfelves over a greater and a greater patt ofthe earth, the fearch
for new mines, being extended over a wider furface, may have
fomewhat a better chance for being fuccefsful, than when confined
within narrower bounds. The difcovery of new mines, however,
as the old ones come to be gradually exhaufted, is a matter of the
greateft uncertainty, and fuch as no human fkiil or induftry can

enfure. All indications, it is acknowledged, are doubtful, and.
the actual difcovery and fuccefsful working of a new: mine can:

alone afcertain the reality of its value, or even of itsexiftence.. In
this fearch there feem to be no. certain'limits either'to the polfible
fuccefs, or to the poffible difappointment of human induftry. In the

courfe of a century or two, itis poffible that new mines may. be.

difcovered more fertile than: any that have ever yet been known;

and it is juft equally. poffible that the moft fertile:mine then. known,

may be more barren than any. that was wrought before the dif-
covery of the mines of America, Whether the one or the other
of thofe two events may happen to take place, is of. very little im-
portance to, the real. wealth and profperity of the world, to the
seal. value of the.annual produce of the land and labour of ‘man-
kind. .Its.nominal.value, the quantity of gold and filver by .which

this annual. produce could be exprefled or reprefented, would, no.
doubt, be very different; but its real value, the. real quantity of

labour which it could purchafe or command, would be precifely
the fame; A fhilling,might in. the one cafe reprefent.no more, la-
bour than a penny: does at prefent; and a penny. in the other might
reprefent as much as-a fhilling does now. But.in the one cafe

he who had a fhilling in his pocket, would be no richer than he-

who has a penny at prefent; and in the other he who had a penny

would |

—-» se. op Os . o> ae ct ae eae

THES WERALTH, OFs MATIONS:

299

wouldibejuft as rich ashe whohas a shilling now... The cheapnefs CHD A Py
and abundance of gold and. filver plate, would be'the fole advantage eay—w

which the world could derive from the.one event, andthe dear-

neG:qnd:fearcity of thofe:trifling yc the only.i semis
it: — fuffer from the other. er!

Conclufion of the Digrefion concerning the Variations in the Value
Fo aie of Silver. gin
“THe greater part of the writers who have collested the money
prices of things in antient times, feem to have confidered the
low money. price of corn, and of goods in general, or, in other
te the high \ value of gold and: filver, as a proof, not only of
he {catcity < of thofe metals, but of the poverty and barbarifm of
th e country at the time when it took place. This notion is con-
neéted with the’ fyftem of political economy which reprefents na-
tional wealth as confifting i in the abundance, and national poverty
in ‘the Tearcity of gold and filver; a fyftem which I {hall endeavour
to explain and examine at great length in the fourth book of this
enquiry, I thall only obferve at prefent, that the high valle of the
pares metals can be no proof of the poverty or barbarifin of
witakakiy st country at the time when it took place.’ It isa
pi 90 only of the barrennefs of the mines which happened at that
time’ to fupply the commercial world. A poor'cotintry, as it
cannot afford to buy more, fo it can as little afford’ to pay dearer
for gold and filver than a rich one; and the value of thofe metals,
therefore, is not likely to be higher in the former than in the
latter. “In China, a country much richer than any part of Eu-
rope, the value of the precious metals is much higher than in any
part of Europe. As the wealth of Europe, indeed, has increafed
greatly fince the difcovery of the mines of America, fo the value
Qq2 of

466

THE INAPURE ANDI CAWSESHOF

BOHR oh yoldrand filver Heagradaally dittiini¢heds rT his: diminution of
Kesryned tlicir'valae,; however, hasnot been owing: to the: increafel of the

‘nor mende

s6al’ wealth! of Europe; of the! annual producejofi its landsand dae
Sour, :butitolthe accidental difeovery of more-abuadant mines:than
any! thatowere! known before, |: Theiincreafe of the quantity:dfi gold
and filver in Europe, and the increafe of its manufactures; and agri-
culture, are two events which, though they have happened nearly
about the, fame time, yet have, arifen from, very different,cayfes,
and have, fearce. any natural conne¢ction, with onejanother. ;,The
one. has arifen from a.mere,accident, in which neither, prudence

nor policy either had or could have any fhare; The. other from

the fall of the feudal fyftem, and from the eftablifhment of a
government which afforded to induftry, the only encouragement

which it requires, fome tolerable fecurity that jit Aball enjoy, the

fruits of its own labour. Poland; where the feudal fyftem ftill
continues to. take place, is at this day as beggarly a country, as it

.was before the difcovery of America. The money price of corn,
however, has rifen 3, the real value of the precious metals. Aas, fallen
‘in Poland, in the fame. manner asin other parts of Europe. Their
‘quantity,, therefore, mutt have. increafed there as in other places,
and, nearly. in the fame proportion to the annual produce of. its
fand, and, labour, This increafe of the quantity of thofe metals,

however, has not, it _feems, increafed that annual produce,, has
neither ii zit the manufactures and agriculture of the country,

e circumitances ‘of its inhabitants, Spain, and Por-
tugal, . the’ countries which poffefs the mines, are, after Poland,

perhaps, the two moft beggarly countries in Europe. , The value
‘of | the precious: metals, however, muft be lower in Spain and
“Portugal ‘than ji in any ‘other | part of Europe; as they. come from

thofe countries to all other parts of Europe, loaded, not, only with

‘a freight and an infurance, but with the expence of fmuggling,

their, exportation being either prohibited, ox fubjetted to a duty. In
-propertion

oof
f:ahe
dilae
than
igold
agri-
early
aufes,
The
dence
from
t of a
pment
Y the
n fill
tas it

‘COIR,
fallen

Their
places,
of, its
etals,
6», has
untry,
H Por-
oland,
value
in and
_ from
y with
reling,
ty. In
bartion

pene From the high or low money Price ‘either oF g goods in

IDHEI WEA LMM OH Ns T1 ONS

proportiosté thaiannual produce ofsthe:tand: ard Jabour,,theres © gar. P.
fore} their quantity muft;be greater in thafd countries than: in,ARY ‘\eryre

ethén:past.ef Burope:: |Thofe:countries, however, ‘are, poorer, than
the greater part. of Europe... Though, the: feudal fyftem: has been
abolifhediin: Spain and): Portugal) it has!not:been:' fucceeded: by: a
much cial
“As ere’ value of of yold aitd seas staehnei is NO ‘proof of the
Wealth ahd foutifhing* ftate' of ‘the country where’ it takes’ place;
46 nieither ‘is’ their’ high value, or ‘the low’ money price either of
‘goods it’ general or of corn in i PRMSSuER, ‘any proof of its poverty
‘and barbarifm. ‘ :
VS OEE MOONS Vii ot Wit tidpD ; ; Hes rdey i
i 'BUr"tho tigh ‘the Tow money price either of i goo in general, or
‘of ed corn th particular, be no ‘proof of the poverty or barbarifm of
‘the times, the low’ money price of fome particular forts of goods,
fuch as cattle, poultry, game of all’ kinds, in proportion’ to that

‘of cori, isa toft'decifive one. “IY clearly demonttrates, firlt, their

igieat abundance ‘in proportion to that of corn, and confequently
the’ Brea extent of the land which they occupied in proportion to.

“What Was occupied by corn; and, fécondly, the low value’ of this
‘tdhd' in proportion to that of corn land, and ‘confequently ‘the Un-
“eileivated dnd Unimproved ftate of the’ far greater part of the fands

of the edunitty. It clearly demonftrates that ‘the ftock and | Popu-
lation ‘of ‘the country did not bear the fame proportion to the ex-
tent of its territory, which they commonly do in civilized countries,
‘and that foci¢ty' was at that time, and in that country, but in its.

eh itgal

which | at that time happened to fupply the ‘commercial world with

‘gold'and filver, were fertile or barren, not that the ‘country was.
rich or poor, But from the high or low money price of fome

forts

40a

‘THE NATURE AND ‘CAUSES OF

B eo K forts: df goode iw ptoportion tothat of othery, we can infer-with'a
one dejfree of probability that dpproaches alo to certainty, that ‘it

was-rich or poor, ‘that the greater’ part of ‘its lands were'improved
orunimproved,: ‘and that it was either ina more of tes barbarous
ftate, or in a more or lefs civilized one. raoge od obaluodtih

Any rife in the money price of goods which proceeded altogether
from: the degradation of the value of :filver, would affect all: forts
of goods equally, and: raife: their price wniverfally..@ third,-or a
fourth, or a fifth part higher, according as filver happened to
lofe athird, ora fourth, or a fifth part of its former value. But
the rife in the price of provifions, which has been the: fubject of
fo much reafoning and converfation, does not affeét all, forts: of
provifions equally. Taking the courfe of the preient century at
an average, the price of corn, it is acknowledged, even by thofe
who account for this rife by the degradation of. the value of filer,
has rifen much lefs than that of, fome other forts of provifions,
The rife in the price of thofe other forts , of provifions,.. therefore,
cannot be owing altogether to the degradation of the value of
filver. Some other caufes mutt be taken into the account, and

thofe which have been above affigned, will, perhaps,, without

having recourfe to the fuppofed degradation of the value of filver,
fufficiently explain this rife in thof par: ‘cular fortg. of provifions
of which the. price. has a¢tually rifen in. proportion, to, that: of

COrMe.

Asto the price of corn itfelf, it has, during, the, fixty-four firtt
years of the prefent century, and before the late extraordinary. courfe
of bad feafons, -been,: fomewhat lower than it was, during the fixty-
four laft years ofthe preceding century. ‘Fhis fact is attefted,
not only by the accounts of Windfor market, but by the publick
fiars of all the. different counties of Scotland, and by the accounts

ee eo ee ee ee

filver,
ifions
hat: of

ar firtt
courfe
fixty-
efted,
ublick
ounts

THE | WERALTH: OF KATAONS: $93

of fevorel different markets in France,.which “we bten collected © HA P.
with:great..diligence and ‘fidelity by. Mr. /Metunce. andi by. Mr, a.
Dupré -de £t.;Maur., ‘The evidence is more compleat that, could
well: trave ‘been expected in a matter which is mime very
psc tobe mreremitney

A’ totlie high price of corn during thefe laft ten or twelve years,
it can be fufficiently accounted for from the badnefs of the feafons,
without fuppofing any degradation in the value of filver.

Tue opinion, therefore, that’ filver’ is continually finking in
its value, feems not to be founded’ upon any good obfervations,.
either’ upon the’ prices of com, or ‘tion thofe of other provi--
fions. nee 4

Pa fame quantity of filver, it'may, perliaps, be faid, will in.
the prefent times, even according to the account which has been
here | given, -purchafe a much fmaller quantity of feveral forts of
provifi ions than it would have done during fome part of the laft
century ; and’ to. afcertain whether this change be owing to a rile:
in the value of thofe goods, .or to a fall in the value of filver, is only:
to eftablith a vain: and ufelefs diftinétion, which can be of no-fort
of fervicé to ‘the'man who has only a certain quantity of ‘filver' to.
go to market with,. or a certain fixed revenue in’ money. “’'T'cer- q
tainly do not’ pretend that the knowledge of this diftinétion’ will:
enable him: to buy cheaper. It may not, however, upon that:
account, be altogether ufelefs..

Ir may be of fome ufe tothe publick by setaing ant eafy proof
of the profperous condition of the country. If the rife-‘in the price:

of fome forts of provifions be owing altogether to a: fall in the:
value of filver, it is owing to a circumftance from which nothing ;
4; can:

THE NATURE AND CAUSES OF

one ‘can be infetred but the fertility of the American mines. The
uayaw real wealth of the country, the annual’ produce of’ its. land. and

Jabour, may,’ notwithftanding this circumftance, “be ‘either gra-
dually declining, as‘in' Portugal and Poland; or gradually’

as in moft other parts of Europe. But.if this rife in'the’ price
of fome forts of provifions be owing to a rife in the real ‘Value
of the land which produces them, to its increafed fertility, or,
in confequence of more extended improvement and good culti-
vation, to its having been rendered fit for pfoducing corn, it is
owing to ‘a circumftance which indicatés in the’cleareft manner
the profperous and advancing ftate of the country. “The land
conftitutes by far the greateft, the moft important, on the moft
durable part of the wealth of every extenfive coun Tt may
furely be of fome ufe, or, at leaft, it may give fome aise ion ‘to the
publick, to have fo decifive a proof of the tai valae of by
far the greateft, the moft important, and the moft durable Part
of its wealth.

Ir may too be of fome ule to the publick in a
pecuniary reward of. fome of its inferior fervants. Ht Dis ‘rife
in the price of fome forts of provifions be owin to, a “fall
in the value of filver, their pecuniary reward, provided. it .was
not too large before, ought certainly to be augmentec {jn Broper-
tion to the extent of this fall. If it is not augmente . their 1 real
recompence will evidently be fo much diminifhed. But, if this
rife of price.is owing to the. increafed value, in confequence. of
the improved fertility of the land which produces, fuch Provifions,
it becomes. a much nicer matter to judge either in what Proportion
yany pecuniary reward ought: to be augmented, or whether it ought
to be augmented at all. The extenfion of improvement. and
cultivation, as it neceffarily raifes more or lefs, in proportion to the
price of corn, that of every fort of animal food, fo it as! neceffa-
7 J

THE ‘WEALTH OF NATIONS,

éily lowers that, of, L-believe, every fort of vegetable food... At vues © HA
the. price.of animal feod, becaufe a great pact of the land which ——~

produces it, being rendered Gt for producing corn, muft afford

ta the Jandlord and farmer the rent and profit of corn land, It
lowers.,the price of vegetable foods becaufe by increafing the
fertility of .the land, it increafeg its abundance, The improve-
ments of agriculture too introduce many forts of vegetable
food, which, requiring lefs land and not more labour than corn,
come much. cheaper to market. Such are potatocs and maize, ar
what is ealled Indian corn, the two moft important improvements
which the agriculture of Europe, perhaps which Europe itfelf
has received from the great extenfion of its commerce and navi-
gation, Many forts of vegetable food befides, which in the
rude tate of agriculture are confined to the kitchen gerden, and
raifed only by the {pade, come in its improved ftate to be intra~
duced into common fields, and to be raifed by the plough: fuch
9s turnips, carrots, cabbages, &c. If in the progrefs of im-
provement, therefore, the real price of one fpecies of food ne-
effarily rifes, that of another as neceffarily falls, and it becomes
@ matter of more nicety to judge how far the rife in the one may
be compenfated by the fall in the other. When the real price
of butcher’s meat has once got to its height, Sara with regard
to every: fort, except perhaps that of hogs fiefh, it feems to Rave
done through a great part of England, more than a century ago)
any rife which can afterwards happen in that of any other fort
of animal food, cannot much affect the circumftances of the
inferior ranks ‘of people. The circumftances of the poor through
a great part of Engtand cannot furely be fo much diftreffed by
any rife in the price of poultry, fith, wild-fow!, or vetifon, as they
mutt be relieved by the fall in that of potatoes.

In the prefent fafon of fcarcity the high price of corn no
doubt diftreffes the poor. But in times of moderate plenty, when
Vou, I, Rr corn

See ee ae

ae
= a os — SS

Se _

ARTI rennet EB a

SS ee
ISS EE
2

+ a —

306

THE ONATURDB (AND ‘CAUSES: OF

B oO K corn is at ite ordinary or average price, the natural rife in’ the price
eye of any other fort of rude produce. cannot, much: affect) theny,

They fuffer more, perhaps, by the artificial rife which has been:
occafioned by taxes in. the price of fome; manufattured com.
modities; ‘as of falt, foap, st candles,. malt, . beer ant
ale, &c.

agit of. ths Progref of Improvement upon the real Prie tC
Manufactures.

T ‘is the natural effectvof improvement, however; \to diminish

gradually’ the: real price’ of ‘almoft all manufactures.\0 That of:
the manufacturing workmanfhip ‘diminifhes: perhaps inall‘of. them:
without exception.’ ‘In ‘confequence of better machinery, ‘of
greater Gexterity, and’ of a: more’ proper divifion and diftribution:
of work, ait <f which are the’ natura effects of’ improvenrent,:
a much fmalley quantity of labour becortes requifite’ for executing,
any ‘particitlar ‘piece ‘of work ;.dnd’though in confequenc’ of the
flourithitig ‘circumftancés of the fociety, the real price of ‘labour
fibuld rife Very confiderably, yet the great diminution ‘Of the
quahtity’ ‘will generally’ nfich more than compenfate the greatelt
rife which ean’ happen i in the price,

~ !

THERE are, indeed, a few manufactures, i in which the ene
rife in the real price of the rude materials will more than com-
pehlate all’ the “advantages which improvement ‘can introduce ‘ihto
the execution of the work. In carpenters and joiners ‘work, ‘and
in the coarfer fort of cabinet work, the neceflary rife in ‘the real
price | “of barren timber, in confequence of the improvement of
land, will more than compenfate alt the bean which ie

THE: WEALTH OR JNATIONS |

be? derived’ from | the ‘beft' machinery, the greateft dexterity, and
the: moft proper divifion and diftribution of work, A
1990 eB iimilw oki lertetip any va Leth a } (20)
‘Borr i’ all ‘cafes: in which the real ptice of the rude materials
either ‘does fot: rife ‘at:all, or! does mot’ rife very much,. that of
the manufactured commodity finks very confiderably,

Tuts diminution of price has, in the courfe of the prefent
aid ‘preceeding century, been moft’ remarkable in thofe many’
factures of which the materials are the’ coarfer metals. A better
movement of a watch, than about the middle of the laft century

could::have>ibeen bought for twenty: pounds, may now perhaps:

be hadi for .twenty :fhillings.;; Jai the, work) of: cutlersy and: lock-
fmiths,}0inall the. toys.which are: made. of. the, coarfer, metals,
and inal thofe goods which are commonly known by, the name
of Birmingham and Sheffield ware, there has been,, during. the.
fame period, a very great, reduction of. price,,.though. not. alto-
gather: fo; great;.as, in watch work,., It has,, however, , been, fuf-,
ficient, to aftonith the workmen ,of eyery, other, part of, Europe,.
whq; in; many, cafes acknowledge that. they. can produce no worls;
of; equal goodnefs for double, or even for triple the price... There,
aye, perhaps .np,, manufactures in, which/ghe divifion, of, labour gan,
be carried further, or in which the machinery employed. admits,
of a greater variety of improvements, than thdfe of which the
materials are the coarfer metals.

gan]
mood msi} siom, ! y ; > sq Isot oct me ober
An the, clothing manufacture there has, during the fame period,
bean ge. {yeh fentble redaction of price,,, The prige oF fupering
cloth, I have been affured, on the contrary, has, within thefe.
five and twenty or thirty years, rifen fomewhat in proportion to
its quality; owing, it was faid, to a confiderable rife ‘in the price
of the material, which confifts Mtogether of Spanifh Wool.” That
i Rra2 of

3°7

CHAP.
XI.
eyed |

————— - ==
a ey Se

THE’ NATURE) AND ‘GAUGES :OF

’ of the Yorkthire cloth, which is nvade altogether of Englith wool,.
is faid indeed, during: the, courfe of the: prefent century, to;have
fallen a good dealin. proportion to its quality. Quality, battery
is fo very difputable a matter, that J:lock, upon -all iinformati

of this kirid as: fomewhat-uncertain. . In. the clothing. manu-
facture, the divifion of’ labbur is nearly the fame now, as it. was,
a century ago, and the machinery employed.is not very. different..
There may, : however, have beeh fome fntedl laprovements i in; both,.
whieh: may have. occafioned. fome sedugtion of price. PF diy

Tue redudion, biiviionep will appeas'much: 1 more fenfible and’
undeniable, if we compare the price of this manufacture in the:
prefent times with what it was.ia a much remoter period, towards.
the end of ‘the fifteenth century, when’ the labour was probably’
‘much left’ firbdivided, and the machinery employed much more:
imperfect thax it is.at iprefentt.

In 1487, being the 4th of Henry VIIth, it was. enacted; that
‘< whofeever {hall fell by. retail a ‘broad yard of the fineft {carlet.
‘¢ grained, or of, other grained: cloth of the fineft making, above:
«¢ fixteen ‘fhillings, thal forfeit’ forty thillings for every ‘yard fo
s¢ fold.” Sixteen fhillings, therefore, containing. about the {ame
quantity of filver as four and twenty fhillings of our prefent
money, was, at that time, reckoned not an unreafonable price
for, a_yard of the fineft cloth ; and: as. this is a fumptuary law,,
fuch cloth, it is probable, had ufually been fold fomewhat dearer.
A guinea ‘may be reckoned the higheft price in the prefent times.
Even though the quality of the cloths, therefore, fhould 62° ‘fap-
pofed equal, and that of the prefent times is molt probably’ much
fuperior, yet, even upon this fuppofition, the mdney’ price of
the fineft cloth appears to have béen confiderably reduicttl fince
the end of the fifteenth century, But its real price has been
much

hoth,.

€ and’
in the:
wards.
ably:

vst

* that
fearlet.
above
ard fo.
> fame
refent
price
y law,.
dearer.
times.
efup-
much
rice Of
1 fince
8 been
much

THE "WRAL TH4 OF 1 NAPIONST

miach’ mere iredticed.’"”Six’ fhillings’and: eight-pence was then},
atid’ ‘long afterwards; reckoned ‘the® average “price of >a qaarter
of wheat. \Sixtéen fillings; therefore, was the’ pticesof ctwo
quditers'“dhd:‘more® that’ three’ butte” of ‘Wheat, ) (Valuing:
a ‘Gitarter of ' wheat i in the’ prefent ‘times’ at ‘eight ‘and twenty
fliillings, the real price‘of a yard of fine cloth’ muft, in’ thofe
times, ‘have been equal ‘to at Jeaft three pounds’ fix “fhillings
anid’ fixpétice “of ‘our préfent ‘mionéy, ° "Fhe tan whe bought

it muft have patted’ with the’ ‘comiandof ‘a quantity ‘of labour

and fubfiftence equal to what that fam mete pe in the

preterit tines

nT 195 DY ZITAT eth : YK

aE Ri in’ tie" real oor ‘of’ ei ‘Codtlt ‘ibebianeane,
though donifiderabe, has not been fo fe as in ‘that’ Of the fine.

In 1463, being the 3d of Edward IVth, it was enacted, that
“* no fervant in hufbandry, nor common labourer, nor fervant

ee to, any ‘artificer inhabiting out of a city or burgh, ‘fhall ule

or wear in. their cloathing any cloth above two! fhillings the
te “broad yard, In the 3d of Edward: the TVth, two” fhillings
contained very nearly the fame quantity 0 of filver as ‘four’ of ‘our
prefent money. ° But the Yorkfhire cloth “which “is ‘now fold at

four fhillings the yard, is probably much fuperior té aity" ‘that.
was then made for the wearing. of the very pooreft order of com-
mon, fervants, _ Even the money price of their cloathing, thereféte,.

may,, in ‘proportion to the quality, be fomewhat cheap er in the

prefens than i was in thofe antient times. The real j price is ertainily.
a, good,deal cheaper. Ten pence was, then, reckoned ‘what is.
called, the moderate and. reafonable price, of a “puthel” of wheat..

‘Pwo Ahillings, therefore, was the price of two bufhels: and! ‘hear
two: pecks of wheat, which i in the: ‘prefent times, at three ‘fhillings

and fixpence the buthel,, would be worth cight fhillings and:
nine--

309)
oo
em dima

go THE NATURE -AND CAUSES: OF.

BOOK’: nine-pence. For a:yard of ‘this cloth:the poor fervant' muft have
welts ,parted with the. power: of: putchafing a quantity of \fubfittencé
equal to what: eight..fhillings;,and: nine-pence would purchaf>in’

the, prefent itimes:: - This.isa fumptaaryy law: too, :reftraining’

the luxury:and extravagance of the poor. :; Their cloathing; there.

fore, had commonly been much: more expenfive. 15 ¢ moO!

“Tae: fame’ order ‘of’ people are, by ‘the fame’ Taw; iprohibited

froin” wearing ‘hole, ' of which the ‘price ‘fhould’ exceed” fourteen

peice the pair,’ equal to’ about ‘eight and twenty ‘pence of our

prefent money. But fourteen-pence was in thofe times the price

of a bufhel arid near two pecks of ‘wheat; which in the prefent

times, at three and fixpence the bufhel, “would 'coft five’ fillings

and three-pence. We fhould in the prefent times confider this

asa very high price for a’ pair of ftockings toa ‘fervant of the

pooreft and loweft order: He muft, however, in thofe times

have paid what was really equivalent to this price for them.

ricye CBG Rai E tioo 7] smiet teratesra: ont ot et dr mesa

In'''the ‘time of ‘Edward Vth, the art of knitting ftockings
40) > “ie Dalkiouse Sv hich VEL SjOL stn

was’ probably not known ‘in any part of Europe. Their hofe
were made of coramon cloth, which may have been one of the
caufcs of their dearnefs. The firft perfon that wore ftockings
in England’ 4s faid to’ have Ben Queen’ Elizabeth. “She retkived

THE “WRALTHs OF“ NATIONS:

31d

with! the fame: quantity of labour, «will perform: more thandouble: CHAP.
the quantity of work. Secondly,' the ufe of feveral very ingenious, e~—~

machints which facilitate-and abridge:in'a ftill: greater proportion:
the: winding of the’ worfted:.and : woollefi{ yarny;:or the» proper
arsangement! of ‘the: warp and woof before they: are put: into:!the:
loom ; an operation which, previous to the invention of ‘thofe
machines, muft have been extreamly tedious and troublefome.
Thirdly., The, employment of the fulling-mill for, thickening the
cloth, inftead. of treading it, in water, Neither wind. nor, water,
mills of any. kind, were known in England fo early as the begin-.
ning of the, fixteenth, century, nor, fo, far as I know, in any
other, part, of Europe north of the Alps. They , had. been-intro-

duced, snto.Itply,fome, time before, .

“Tue “confideration -of thefe circumftances may, perhaps, in
fortie meafure explain to us why the real price both of the coarfe
and: of the fine :manufaéture, was fo much higher in thofe antient,
tharrit is in the prefent times. It coft a greater quantity of labour
to -bring the goods to market. When they were, brought thither,
therefore, . they muft. have purchafed or exchanged for the price
of a greater quantity.

“Tare coarfe manufacture; probably. was,.. in,.thofe :antient) times,
carried. on in. England,,in the fame. manner as. it. always. has
been in. countries where. arts and manufactures are in. their
infancy. ., It was probably: a houfhold manufacture,, in, which
evely’ diferent: part of the work was occafionally, performed by
ail the"different members of almoft every private family ; but fo
as‘to Be their ‘work only when they had nothing elfe to do,-and
riot ‘to ‘be ‘the principal, bufinefs from which, any of them, derived

the” gteater part “of their fubfiftence. ‘ The work,.which is, per-
formed in this manner, it has already been obferved, comes always
moire oon Qik ie er aie % mush

THE NATURE AND CAUSES OF

, tauch cheaper. to market than that whieh is the Principal or : fole
t—y— fund of the workman’s fubfiftence, The fine manufacture,
or the other hand, was not in thofe times carried on in England,
but in the rich and commercial cquatry of Flanders 5 and it was
probably conducted then, in the fame manner as now, by people
who derived the whole, or the principal part of their fubfiftence
from it. It was befides a foreign manufacture, and mutt have
paid fome duty, the antient cuftom of tunnage and poundage at
leaft, to the king. This duty, indeed, would not probably be
yery great. It was not then the policy of Europe to reftrain, by
high duties, the importation of foreign manufactures, but rather
to encoyrage it, in order that merchants might be enabled to
fupply, at as eafy a rate as poffible, the great men with the con-
veniencies and luxuries which they wanted, and which the induftry
of their own country could not afford them.

Tue canfideration of thefe circumftances may, psrbaps, ia
fome meafure explain to us why, in thofe antient times, the. real
price of the coarf manufattare was, in: proportion to that of
the fine, fo much lower than in the prefent times.

Concrusion of the CHAPTER.

I SHALL conclude this very long chapter with obferving

that every improvement in the circemiftances of the fociety
tends either directly or indireétly to raife the real rent of Jand,
to increafe the reat wealth of the landiord, his power of pur-
chafing the labour, or the produce of the tihowt of other people.

Tue extenfion of improvement and cultivation tends to raife
it direétly. The landiord’s fhare of the produce neceflarily i in-
creafés with the increafe of the produce.

THAT

THE WEALTH OF NATIONS,

$t3

Tar rife in the real price of thofe parts of the rude pro- EAP.
duce of land, which is firft the sffect of extended improvement wa

and. cultivation, and afterwards the caufé of their being ftill
further extended, the rift in the price of cattle, for example,
‘tends too to raife the rent of land direétly, and in a ftill greater
proportion. The real value of the landlord’s fhare, his real com-
mand of the labour of other peaple, not only rifes with the real
value of the produce, but the proportion of his fhare to the whole
produce rifes with it, That produce, after the rife.in its real price,
requires.no more labour to collect it than, before. A fmaller pro-

portion.of it will, therefore, be fufficient to replace, with the
ordinary, profit, the ftock which employs that labour. A greater

propostion of it muft, confequently, belong to the landlord,

Art thofe ‘improvements in the productive powers of labour,
which tend direétly to reduce the real price of manufactures, tend
indireCtly to raife the real rent of land, The landlord exchanges

‘that part of his rude produce, which is over and above his own

confimption,' or what comes to the fame thing, the price of that

part of it, ‘for manufactured produce. Whatever reduces the seal

price of the latter, raifes that of the former. An equal quantity of
the former becomes thereby equivalent to a greater quantity of the
latter ; and the landlord is enabled to purchafe a greater quantity
of thé. conveniencies, ornaments, or. luxuries, which; he has
occafion for.

Every imcreafe in the real wealth of the fociety, every increafe
in the quantity of ufeful labour empleyed within j it, tends indire€tly
to raife the real rent of land, A certain proportion of this labour
naturally goes to the land. A greater number of men and cattle
are employed in its cultivation, the produce increafes with the
increafe of the {tock Which is thus employed i in Taifing i it, and the
rent increafes with the produce.

Vor. I. Sf : Tue

314

THE) INATPURE? AND: CAUSES | OF

B og K loti contrary circumftances): the neglect of cultivationcand: ims
—~— provement, the fall inthe reab price! of ‘any part’ of the: rude produce

of land, the rife ir the real price of manufactures from the:decay
of manufacturing art and induftry, the declenfion of the real wealth

of the fociety, all tend, on the other hand, to lower the real rent of

land, to reduce the real wealth of the landlord, to diminifh: his
power of ‘purchafing' either the labour, or the produce of the labours
of other people.

THE whos sinalat produce of the tand and labour of every
country, or what comes to the fame thing, the whole price of that
annual ptrod'ice,. naturally divides itfelf, it has. already been obferved,
into three parts; the rent of land, the wages of labour, and the
profits of ftock ; and conftitutes a revenue to three different orders.
of people; to thofe who live by rent, to thofe who live by wages,.
and to thofe who live by profit. Thefe are the three great original
and conftituent orders of every civilized’ fociety, from whofe revenue
that of every ebipee order is ultimately derived. —

Tue intereft’ of the firft of thofe three great orders, it appears
from what has: been juft now faid, is ftri¢tly and inftparably con-
nected with the general intereft'of the fociety. ‘Whatever either pro-
motes or obftruéts the one, neceffarily prornotes orobftructs the other.
When the publick deliberates concerning any regulation of commerce
or police, the proprietors of land never can miflead it, with a view to
promote the intereft of their own particular order at leaft, if they have
any tolerable knowledge ofthat, intereft. They are, indeed, too, often
defeétive in thistolerable knowledge. They are the onlyone of the three
orders whofe revenue cofts them neither labour nor care,, but. comes
to them, as it were, of its own accord, and independent of any plan
or project of their own. That indolence which is. the natura]
effect of the eafe and fecurity of their fituation, renders them.too

7 often,

THE WEALTH OF NATIONS.

315

often; not only ignorant; but incapable of ‘that,application:of mind © Ba P,
which is ‘neceflary in order to forefee and underftand the confes —~—~

quences of any publick regulation.’

- Tue interef of the fecond order, that of thofe who live by
wages, is as ftrictly connected with the intereft of, the fociety as that
of the firft. The wages of the labourer, ithas already been fhewn,
are never fo high as when the demand for labour is continually
rifing, or when the quantity employed is every year’ increafing
confiderably. When this real wealth of the fociety becomes
ftationary, his wages are foon reduced to what is barely enough to
enable him to bring up a family, or to continue the race of
labourers. When the fociety declines, they full even below this. The
order of proprietors may, perhaps, gain more by the profperity
of the fociety, than:that of labourers: but there is no order that
fuffers fo cruelly from its decline, But though the intereft of the
labourer is ftriétly, connected with that of the fociety, he is incapa-
ble either of comprehending that intereft, or of underftanding its
connection with his own. | His condition leaves him: no time to
receive the neceflary information, and his education and habits are
commonly fuch, as to, render him unfit to!judge even though he
was fully informed. In the publick deliberations, therefore, his
voice is little heard and. lefs regarded, except upon fome particular

occafions,, when his clamour is animated, . fet, on, and, fup-.
ported ,by: his employers, not for his,. but their own: particular

purpofes,

‘His employers conftitute the third order, that of thofe who live
by profit. It is the ftock that is employed for the fake of profit,
which puts into, motion. the, greater part of the ufeful labour of
every fociety.; The plans and -projects of the employers of ftock
regulate and direct.all the moft important operations, of labour, and

; Sfa profit

.
eel

316

“THE OWASURE OAMIT JOWUVES! OF

BOOS ptofitistheretmt propofed by wit! shale ptanis din projets: Seabthe
ww ratelof profitaipesmoty likéwent arid-wiigesy rifewith: the qitblpetiey:

and fall with the:declenfion of the fociety, | On the‘ contrary, itis’
naturally low in rich, and high in poor countries, ‘and it i¢ always’
higheft in the countries which are going fafteft to ruin. ‘The intereft'
of this third order, therefore, has not the fame connection with the
general intereft of the fociety as that of the other two. Merchants
and mafter manufaéturers are, in this order, the two clafles of
people who commonly employ the largeft capitals,' and who by
their wealth draw to themfelves the. greateft fhare of the publick
confideration. As during their whole hives they are engaged in
plans and projects, they have frequently more acutenefs of under-
ftanding than the greater part of country gentlemen. As their
thoughts, however, are commonly exercifed tather about the intereft
of their own particular branch of bufinefé, than about that of the
fociety, their judgement, even when given with the gieateft candour,
(which it has not been upon every occafion), is much more to be
depesided wpon with regard to the former. of thofe two objetts, than
with Togard to the fatter. Their faperiority over the country gentie-
man is, not fo much in their knowledge of the publ’ .k intereft, as
in their having a better knowledge of thelr own intereft than ‘he husof
his. It is by this faperior knowledge‘of their own interet thet they
have frequently impofed upon his gencrofity, and perfuaded hith to
give up both his own intereft and that of the publick, froma very
fimple but horteft conviction, that their intereft, and’nothis, was the
intereft of the publick. The intereft of the dealers, however, inamy
particular branch of trade or manufactures, is always in' fome
refpeéts different from, ‘and even oppofite to that of the ‘publick.

To widen the market and to narrow the eomipetition, is always the
imtereft of the dealers. To widen the market thay frequently be
agreeable enough to the inteseft of the publick; but to narrow the
competition muft always be againft it, and can ferve only to enable

Cex

ESS ee rR

THE sWEAL TH AOR INATIO MSS

therdasiers, dy. vaifing their:profite aliove whatthey, taturallywould ©
bee, $0 levy, for their own benefit, an abfiird: tax upon)the tefb-of
their fettow citi” 1s. > The propofal of any new law ‘of regulation
of commerce which comes from this order, ought always to be
liftened to with great precaution, and ought never to be adopted till
after having been long and carefully examined, not only with the
moft fcrupulous, but with the moft fufpicious attention. It comes
from: an order of men, whofe intereft is never exactly the fame
with that of the publick, who have generally an intereft to deceive
and even to opprefs the publick, and who accordingly have, upon
many occafions, both deceived and oppreffed it.

| Price “ the Quarter of| Average of the dif-:
Yor Wheat ain ine

ferent Prices of the
e Year

fame ls

The average Price: of
each Year in Money
of the prefent Times.

f. « th an 2 £. ss @
$202 — 12 == — i 1 16—.
-_j2 == — ce tine —— =
sos]) — 13 4 ¢] = 13 5 | 2 8
omen 1§ eee ? om eam’ Ga mom ome oar
3223 — 12 — —_—— 1: 146 —
23237 —- 3 4 —-— — se —_ 10 —
1243 _ 2 — —— = —- 6 =
y2g6) = 16 = =o a a B=
95g) 14 Oe —— 19S
ae58iy 1S } oe ee he A Ie ye
1270 By he! HI bh 1 — 36.16 —&.
4 moe Bales ol ore via.
12868 we 6 = } Pras ait Lon

ed
E

a 2
.

317

BAP

xl.

‘ e
°
——— ———————- ee .

THE. NATURE AND CAUSES OF

Years| Price of the Quarter of |Averageof the dif-) The average Price of
; ferent Prices of the} cach Year in Mone
XII, Wheat each Year. fame Year. of the prefent T meas

——

1287

eens
TELLS

3 blids
PEELED TI s ws

PPddoltP ao TIT i tiled itil fp tibids
|

LLwseolIislldlbt<oeat kes

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plolJITTIVI Pile LL TL ol | law loon dl acw®

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PRP edddee PIPITETEP tii
LP dda tld aw lestow tT atttdl

PibIlst tl

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=

Total,

N
w

Average Price,

of Years |Price of the

ht XII.

nana £.
1339 b sas
1349 oo
1359 I
1361 —
1363} — 1

+ 1369 ; :

J 1379 ssa

: 1387 —

= { een 1

' 1390 — 1

_ l nee

+5 1401 — 1

; 1407/{

2 1416 — 1

: é

mi a

4 ae

i.
.
Is ee
8 =

THE! WEALTH OF NATION'S!

Average’/of the. dif-| Tho, average: Price of
fen Prices of the]: each Yearein M

Wheat cach Year. of the prefent Times.

Plirds
3
lo lao o Gawnun?

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laa lial Iti dloltls
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i enna cet

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a a RO IN RA TS
ee andae ethan: aetna
= ses :

THE NATURE AND CAUSES OF

Average of the dif-|The average P
> Price of ¢ Prices
sir Wheat the Qapiter ter aren Pee of the id Year in M

1453
1455
1457
1459
1460
1463 j
1464
1486
1491
1494
1495
1497

ee ee ee

lune AsV COUN HH

Ltritti e GUreds

I> 1 ol] cal j | conan’

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=
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Pridtdddts
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:

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2

PEt) EUTEEt adds

—HPibis TIIititiols

Sittiw LULPUtitts
I
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i
8
z
2
:
oy

THE: WEALTH/ OFM NATMONS: 321

h '
Sear | Poa she ater f| ent eset he ‘ath Went tng ri

Wheat each Year

1 8 of the prefent Times,
Se da Ae OE
1561 } 8

1562 8
1574|)

1587
1594
1595
1596
1597
1598
1599
1600
1601]

se .
<=> =—-

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Pidice Iti tie 3
asm D PF PRNNYW VN | |

o0 ta os 00 htm dD eee oc 2 | 2

ont
Oo coN C

Total,

Average Price,

THE NATURE AND CAUSES: OF

‘=

Prices. of the Quarter of nine Bufbels of the bef or bighef priced
Wheat at Windjor Market, on Lady-day. and Michaelmas, from
1595 20 1764, both inclufive; the Price of each Year being the
medium between the bigheft Prices of thofe Two Market Days.

a)
~

Years.

1595»
1596,
1597»
1598,
1599;
1600,
1601,
1602,
1603,
1604,
1605,
1606,
1607,
1608,
1609,
1610,
1611,
1612,
1613,
1614,
1615;
1616,
1617,
1618,
1619,
1620,

Years.

oS
:
Ne

1621,
1422,
1623,
1424,
1425,
1626,
1627,
1423;
1629,
1630,
1631,
1632,
1633;
1634,

1635,
1636,

eee eeeeeeenee
PEETTEPPbrrretetl

RNNNRPWDNDN Hs DNDNNND &
COdCOPOBWVOCOPROCO0 OC CEH

Lol
sr 2 = I As a an I nl mL ER BP

PPP EE EEE PEP PPP rb ee
PEP PLYITEPEERPERIT RFUTEEELIE

HN =NNNHNDNDN MADD | ee ee ee mt Nw DD
RP OER COCCAR COO OO COCO OC ORR OO ON CHOHOO

N
fo.)
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wn
pf
— me
° ON Aeto Oe ON
bes

THE WEALTH OF NATIONS, 323

Wheat per quarter. Wheat per quarter. CHAP.
X

Years. f. s. de Years. fot ad \. ,
1637;

1638,
1639,
1640,
1641,
ts in the

Brought over, 79
1671, —
I 672,
1673,
16745
1675;
1676,
1677,
1678,
1679,
1680,
1681,
1682,
168 3,
1684,
1685,
1686,
1687,
1688,
1689,
1690,
I 4 T,
16925
16935
1694,
1695) °
1696, ::
1697,
1698,
1699)
1700,

Lon}
~

CORACDOOMBUOKIPGADGCWVW AO MOGCOCGMVIVDVI WMHWeO OO

eto a Se
164555 Fleetwood. ie
1646, —
1647;
1640,
1649, ;
1650,
16651,
1652,
1653,
1664,
16655
1656,
165 ?
1666,
1659,
1660,
1661, .,
1662,
1663;
1664,
166 5»
1666,
1667) «
1668, >
3669,
1670, °

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1702,
3703;
1704)
1705,
1706,
1707,
4708,
1709,
1710,
1711,
1712,
31713;
1714;
17155
1716,
1717;
1718,
1719;
1720,
1721,
1722,
14/235
17724,
1725,
1726,
17275
1728,
1729;

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Wheat per quarter,

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Years, . Lh ei
Brought ve 69- 8. Bo:
1734) San 2 Be Hoo:
ont: eee ae ee
1730, “— OO
1737, — -— 118;
£738, a me 8
0739, = ET
0740, MT BUG.
1741, — — 2-6
1744, oo Th
S7egh Seen et
1744, “ome 4
1745, “oo © 7
1746; —--— 1°19:
1747) (“—" 14:10
1748, — — 1170
Penge Ee RES
0750, mmm 12 6
47513 moe 18 6
2763, So 2 2 8G
1753, — — 2 48
1754, — — 114° 8
1765, “""— T3480
B7 507) Se OG
ol ga SRE UR EES
1758, — —— 2°10:'0
1759) “" = 1 19:10
1760, — — 116 6
1763, = — 10-3
1762, —-—= 119.0
1763, — = 20 9
1764, = = 2 69

64)129 13 6

Wheat per OY

THE NATURE AND. CAUSES / GF

2.0 6:2

0 A200 0 MHADO

THE WEALTH OF NATIONS. 325

Wheat per quarter. Wheat per quarter. CHAP,
Years, Ke ted Years, Le te de XI.

——
1731s 1741, 6 8
1732, 1742, 14 0
1733 1743» 4 10
1734» 17445 4 10
1735» 1745» 7 6
1736, 1746, 19 oO
1737) 1747» 14 to
1738, 1748, 17 0
1739» 1749» 17 9
1740, 17505 12 6

16 18 2

tt ot ee eet

( 327 )

BOO K IT.

Of the Nature, Accumulation, and Employment
of Stock.

INTRODUCTION.

N that rude ftate of fociety in which there is no divifion of
tabour, in which exchanges are feldom made, and in which
every man provides every thing for himfelf, it is not neceffary that
any ftock fhould be accumulated or ftored up beforehand in order
to carry on the bufinefs of the fociety. Every man endeavours to
fupply by his own induftry his own occafional wants as they occur.
When he is hungry, he goes to the foreft to hunt: when his coat
is worn out, he cloaths himfelf with the fkin of the firft large
animal he kills: and when his ‘ut begins to go to ruin, he
repairs it, as well as he can, with the trees and the turf that are
neareft it.

But when the divifion of labour has once been thoroughly in-
troduced, the produce of » man’s own labour can fupply but a
very fmall part of his occafional wants. The fai greater part
of them are fupplied by the produce of other mens labour, which
he purchafes with the produce, or, what is the fame thing, with
the price of the produce of his own. But this purchafe cannot be
made till fuch time as the produce of his own labour has not only
been compleated, but fold. <A ftock of goods of different kinds,

therefore,

328 THE NATURE AND CAUSES OF

BOOK therefore, muft be ftored up fomewhere fufficient to maintain him,

— and to fupply him with the materials and tools of his work till :
{uch time, at leaft, as both thefe events can be brought about. q
A weaver cannot apply hirafelf entirely to his peculiar bufinefs, P
unlefs there is beforehand ftored up fomewhere, either in his own ‘
po% om or in that of fome other perfon, a ftock fufficient to ‘
nvait uit, aim, and to fupply him with the materials and tools of é
his work, till he has not only compleated, but fold his web. t
This accumulation mutt, evidently, be previous to his applying his. i
induftry for fo long a time to fuch a peculiar bufinefs. ,

As the accumulation of ftock muft, in the nature of things, be q
previous to the divifion of labour, fo labour can be more and more
fubjivided only in proportion as ftock is previoufly more and more.

accumulated. The quantity of materials which the fame niumber it
of people can work up,. increafes in a great proportion as labour
comes to be more and more fubdivided; and as the operations of

each workman are gradually reduced to a greater degree of fimpli- i

city, a variety of new machines come to be invented for facilitating ‘

and abridging thofe operations. As thedivifion of labour advances, r

therefore, in order to give conftant employment to an equal num-
ber of workmen, an equal {tock of provifions, and a greater ftock
of materials and tools than what would have been neceffary in a
ruder ftate of things, muft be accumulated beforehand. But the
number of workmen. in. every branch of bufinefs generally increafes
with the divifion of labour in that branch, or rather it is the
increafe of their number which enables them to clafs and -{ubdivide.
themfelves in this manner..

As the accumulation of ftock is previoufly neceflary for carrying
on this great improvement in the productive powers of labour,
fo that accumulation naturally leads to this improvement. The
7 _ perfon

THE WEALTH OF NATIONS,

329

perfon who employs his ftock in maintaining labour, neceffarily troduction.

wifhes to employ it in fuch a manner as to produce as great a
quantity of work as poffible. He endeavours, therefore, both to
make among his workmen the moft proper diftribution of employ-
ment, and to furnifh them with the beft machines which he can
either invent or afford to purchafe. His abilities in both thefe
refpects are generally in proportion to the extent of his ftock, or
to the number of people whom it can employ. The quantity of
induftry, therefore, not only increafes in every country with the
increafe of the {tock which employs it, but, in confequence of
that increafe, the fame quantity of induftry produces a much greater
quantity of work.

Suem are in general the effects of the increafe of ftock upon
induftry and its productive powers.

In the following §k I have endeavoured to explain the nature
‘of ftock, the effects of its accumulation into capitals of different
kinds, and the effects of the different employments of thofe capi-
tals. This book is divided into five chapters. In the firft chapter,
I have endeavoured to fhow what are the different parts or branches
into which the ftock, either of an individual, or of a great fociety,
naturally divides itfelf. In the fecond, I have eadeavoured to
explain the nature and operation of money confidered as a particu-
Jar branch of the general ftock of the fociety. The ftock which
is accumulated into a capital, may eithet be employed by the perfon
to whom it belongs, or it may be lent to fome other perfon. In
the third and fourth chapters, I have endeavoured to examine the
manner in which it operates in both thefe fituations. The fifth
and laft chapter treats of the different effects which the different
employments of capital immediately produce upon the quantity
both of national induftry, and of the annual produce of land and
labour.

Vou. I. Uu

BOOK
II

THE NATURE AND CAUSES OF

CHAP. I.
Of the Divifion of Stock.

HEN the ftock which a man poffeffes is no more than
fufficient to maintain him for a few days or a few weeks,
he feldom thinks of deriving any revenue from it. He confumes it
as fparingly as he can, and endeavours by his labour to acquire
fomething which may fupply its place before it be confumed alto-
gether. His revenue is, in this cafe, derived from his labour

only. This is the ftate of the greater part of the labouring poor
in all countries.

But when he poffefies {tock fufficient to maintain him for
months or years, he naturally endeavours to derive a revenue from
the greater part of it; referving only fo much for his immediate
confumption as may maintain him till this. revenue begins to come
in. His whole ftock, therefore, is diftinguifhed into two parts.
That part which, he expects, is to afford him this revenue is called
his capital, The other is that which fupplies his immediate con-
fumption ; and which confifts either, firft, in that portion of his
whole ftock which was originally referved for this purpofe; or,
fecondly, in his revenue, from whatever fource derived,. as it gra-
dually comes in; or, thirdly, in fuch things as had been purchafed
by either of thefe in former years, and which are not yet entirely
confumed ; fuch as a ftock of cloaths, haufhold furniture, and the
like. In one, or other, or all of thefe three articles, confifts the

ftock which men commonly referve for their own immediate con-
fumption.

7
THERE

THE WEALTH OF NATIONS, 331

TuweRe are two different ways in which a capital may beem- C HA P,
ployed fo as to yield a revenue or profit to its employer. Ke

First, it may be employed in raifing, manufacturing, or pur-
chafing goods, and felling them again with a profit. The capital
employed in this manner yields no revenue or profit to its employer,
while it either remains in his poffeffion or continues in the fame
fhape. The goods of the merchant yield him no revenue or profit
till he fells them for money, and the money yields him. as little till
it is again exchanged for goods, His capital is continually going
from him in one fhape, and returning to him in another, and it is
only by means of fuch circulation or fucceflive exchanges that it

more than
few weeks,
confumes it
to acquire
fumed alto-

ices can yield him any profit. Such capitals, therefore, may very
ing poor properly be called circulating capitals.
SECONDLY, it may be employed in the improvement of land,
in him for

in the purchafe of ufeful machines and inftruments of trade, or
in fuch-like things as yield a revenue or profit without changing
mafters or circulating any further. Such capitals, therefore, may
very properly be called fixed capitals.

evenue from
3 immediate
tins to come
) two parts.
nue is called
nediate con-
tion of his
urpofe ; or,
» aS it gra-
en purchafed
"yet entirely
Ire, and the
confifts the
mediate con-

DIFFERENT occupations require very difteent proportions be-
tween the fixed and circulating capitals employed in them.

Tue capital of a merchant, for example, is altogether a circu-
lating capital. He has occafion for no machines or inftruments
of trade, unlefs his fhop or warehoufe be confidered as fuch.

Some part of the capital of every mafter artificer or manufac-
turer muft be fixed in the inftruments of his trade. This part,
however, is very fmall in fome, and very great in others, A matter

Uua2 taylor

THERE

' 338

THE NATURE AND CAUSES OF

BOOK taylor requires no other inftruments of trade but a parcel of needles.
gusta Thofe of the mafter fhoemaker are a little, though but a very

little, more expenfive. Thofe of the weaver rife a good deal above
thofe of the fhoemaker, The far greater part of the capital of
all fuch mafter artificers, however, is circulated either in the wages
« their workmen, or in the price of their materials, and repaid with,
a profit by the price of the work.

In other works a much greater fixed capital is required. In a
great iron-work, for example, the furnace for melting the ore,
the forge, the flitt-mill, are inftruments of trade which cannot be
ereéted without a very great expence. In coal-works and mines
of every kind, the machinery neceffary both for drawing out the
water and for other purpofes, is frequently ftill more expenfive,

THAT part of the capital of the farmer which is employed in
the inftruments of agriculture is a fixed ; that which is employed

in the wages and maintenance of his labouring fervants, is a circu-
lating capital. He makes a profit of the one by keeping it in his
own poffeffion, and of the other by parting with it. The price or
value of his labouring cattle is a fixed capital in the fame manner
as that of the inftrumenis of hufbandry: Their maintenance is a
circulating capital in the fame manner as that of the labouring
fervants. The farmer makes his profit by keeping the labouring
cattle, and by parting with their maintenance. Both the price and
the maintenance of the cattle which are bought in and fattened,
not for labour, but for fale, are a circulating capital, The farmer
niakes his profit by parting with them. A flock of fheep or a herd
of cattle that, in a breeding country, is bought in,’ neither for
labour nor for fale, but in order to: make a profit by their wool,
by their milk, and. by their increafe, is a fixed capital. The profit
is made by keeping them, Their maintenance is a circulating

capital,

Peo

—

a fF fe >

THE WEALTH OF NATIONS, 333

capital, ‘The profit is made by parting with it; and it comes CHAP.
back with both its own profit, and the profit upon the whole price H+y—w
of the cattle, in the price of the wool, the milk, and the increafe.

The whole value of the feed too is properly a fixed capital. Tho’

it goes backwards and forwards between the ground and the granary,

it never changes mafters, and therefore does not properly circulate,

The farmer makes his profit, not by its fale, but by its increafe.

Tue general ftock of any country or fociety is the fame with
that of all its inhabitants or members, and therefore naturally
divides itfelf into the fame three portions, each of which has a dif-
tinct function or office.

Tue Firft, is that portion which is referved for immediate con-

fumption, and of which the chara¢teriftick is, that it affords no

1 in revenue or profit, It confifts in the ftock of food, cloaths, houf-
oyed hold furniture, &c, which have been purchafed by their proper
rctl- confumers, but which are not yet entirely confumed. The whole
his ftock of mere dwelling houfes too fubfifting at any one time in the:
e or country, make a part of this firft portion. The ftock that is laid.
nner out ina houfe, if it is to be the dwelling houfe of the proprictor,
is a ceafes from that moment to ferve in the function of a capital, or to
ring / afford any revenue to its owner. A dwelling houfe,. as fuch, con-
ring tributes nothing to the revenue of its inhabitant; and though it
and is, no, doubt, extremely ufeful to him, it is as his cloaths and:
ned, houfho'd furniture are ufeful to him, which, however, make a
rmer part of his expence, and not of his revenue. If it is to be lett to
herd a tenant for rent, as the houfe itfelf can produce nothing, the:
r for tenant muft always pay the rent out of fome other revenue which:
vool, he derives either from labour, or ftock, or land. Though a houfe,
rofit therefore, may yicld.a revenue to its proprietor, and thereby ferve:
ating in. the function of a capital to him, it cannot yield any to the:
pital, publick,,

334

THE NATURE AND CAUSES OF

BOOK publick, nor ferve in the function of a capital to it, and the revenue
t—v—_ of the whole body of the people can never be in the fmalleft degree

means of procuring a revenue, not only to their proprietor who

increafed by it. Cloaths, and houfhold furniture, in the fame
manner, fometimes yield a revenue, and thereby ferve in the func.
tion of a capital to particular perfons, In countries where maf-
querades are common, it is a trade to lett out mafquerade dreffes
for a night. Upholfterers frequently lett furniture by the month
ur by the year. Undertakers lett the furniture of funerals by the
day and by the week, Many people lett furnifhed houfes, and get
arent, not only for the ufe of the houfe, but for that of the fur-
niture. The revenue, however, which is derived from fuch things,
muft always be ultimately drawn from fome other fource of reve-
nue, Of all parts of the ftock, either of an individual, or of a
fociety, referved for immediate confumption, what is laid out in
houfes is moft flowly confumed. A ftock of cloaths may latt
feveral years; a ftock of furniture half a century or a century ;
but a ftock of houfes, well built and properly taken care of, may
Jaft many centuries. Though the period of their total confump-
tion, however, is more diftant, they are ftill as really a ftock re-
ferved for immediate confumption as either cloaths, or houfhold
furniture.

Tue Second of the three portions into which the general ftock
of the fociety divides itfelf, is the fixed capital; of which the cha-
racteriftick is, that it affords a revenue or profit without circulating
or changing mafters. It confifts chiefly of the four following
articles :

First, of all ufeful machines and inftruments of trade which
facilitate and abridge labour :

Seconpty, of all thofe profitable buildings which are the

letts

* «485 f= = 82 +23, bs Ses

1C=
afs
fles
nth
the
get
urs
1gS,
Ve~
of a
t in
latt
iry :
may
mp-
re-

hold

tock
cha-
iting
ving

hich

the
who
letts

THE WEALTH OF NATIONS.

335

Jetts them for a rent, but to the perfon who poffeffes them and C HAP.
pays that rent for them; fuch as fhops, warehoufes, workhoufes, ——~

farmhoufes, with all their neceflary buildings, ftables, granaries,
&c. Thefe are very different from mere dwelling houfes. They
are a fort of inftruments of trade, and may be confidered in the
fame light :

TuirDLy, Of the improvements of land, of v.hat has been
profitably laid out in clearing, draining, enclofing, manuring, and
reducing it into the condition moft proper for tillage and culture.
An improved farm may very juftly be regarded in the fame light
as thofe ufeful machines which facilitate anid abridge labour, and
by means of which, an eqifal circulating capital cavi afford a much
greater revenue to its employer, An improved iarm is equally
advantageous and more durable than any of thofe machines, fre=
quently requiring no other repairs than tiie raoft profitable applica-
tion of the farmer's capital employed in cultivating it :

Fourtuty, of the acquired and ufeful abilities of all the inha-
bitants or members of the lociety. The acquifition of fuch talents,.
by the maintenance of the acquirer during’ his education, ftudy, or
apprenticefhip, always cofts a real expence, which is a capital:
fixed and realized, as it were, in his perfon. Thofe talents, as
they make a part of his fortune, fo do.they likewife of that of the
fociety to.which he belongs. The improved.dexterity of a work-
man may be confidered in the fame light as a. machine or inftru-
ment of trade which facilitates and abridges labour, and which,
though it cofts a certuin expence, repays that. expence with a
profit.

Tuz Third and laft of the three portions into which the general
ftock of the fociety naturally divides itfelf, is the circulating capital;
of

THE NATURE AND CAUSES OF

336

B sai K of which the characteriftick is, that it affords a revenue only by C
Lene circulating or changing mafters, It is compofed likewife of four Lines
parts : larly
} in tl
First, of the money by means of which all the other three are
circulated and diftributed to their proper ufers and confumers ; ; :
)
Seconpty, Of the ftock of provifions which are in’ the pof- pti
feffion of the butcher, the grazier, the farmer, the corn-merchant, ee
the brewer, &c. and from the fale of nee they expect to derive Thi
a profit : : | fan

TuiRDty, of the materials, whether altogether rude, or more
or lefs manufactured, of cloaths, furniture, and building, which
are not yet made up into any of thofe three fhapes, but which
remain in the hands of the growers, the manufacturers, the mercers
and drapers, the timber-merchants, the carpenters and joiners, the
brickmakers, &c.

Fourtuty, and laftly, of the work which is made up and
compleated, but which is ftill in the hands of the merchant or
manufacturer, and not yet difpofed of or diftributed to the proper
ufers and confumers; fuch as the finifhed work which we fre-
quently find ready made in the fhops of the fmith, the cabinet-
maker, the goldfmith, the jeweller, the china-merchant, &c. The
circulating capital confifts, in this manner, of the provifions, ma-
terials, and finifhed work of all kinds that are in the hands of their
refpective dealers, and of the money that is neceflary for circulating
and diftributing them to thofe who are finally to ufe or to confume
them.

THE WEALTH OF NATIONS,

337

Or thefe four parts three, provifions, materials, and finifhed CHAP.
work, are, either annually, or in a longer or fhorter period, regue L-—~

larly withdrawn from it, and placed either in the fixed capital or
in the ftock referved for immediate confumption.

Every fixed capital is both originally derived from, and requires
to be continually fupported by a circulating capital. All.ufeful
machines and inftruments of trade are originally derived from a
circulating capital, which furnifhes the materials of which they are
made, and the maintenance of the workmen who make them.
They require too a capital of the fame kind to keep them in con-
ftant repair.

No fixed capital can yield any revenue but by means of a circu-
lating capital, The moft ufeful machines and inftruments of trade
will produce nothing without the circulating capital which affords
the materials they are employed upon, and the maintenance of the
workmen who employ them. Land, however improved, will
yield no revenue without a circulating capital, which maintains the
labourers who cultivate and colleét its produce.

To maintain and augment the ftock which may be referved for
immediate confumption, is the fole end and purpofe both of the
fixed and circulating capitals. It is this {tock which feeds, cloaths,
and lodges the people. Their riches or poverty depends upon the
abundant or fparing fupplies which thofe two capitals can afford to
the ftock referved.for immediate confumption.

So great a part of the circulating capital being continually with-
drawn from it in order to be placed in the other two branches of
the general {tock of the fociety, it muft in its turn require continual

Vou. I, X x fupplies,

338

THE NATURE AND CAUSES OF

B ao K fupplies, without which it would foon ceafe to exift. Thefe fup-
+— plies are principally drawn from three fources, the produce of land,

of mines, and of fifheries, Thefe afford continual fupplies of pro-
vifions and materials, of which part is afterwards wrought up into
finifhed work, and by which are replaced the provifions, mate-
rials, and finifhed work continually withdrawn from the circulating
capital, From mines too is drawn what is neceffary for maintain-
ing and augmenting that part of it which confifts in money. For
though, in the ordinary courfe of bufinefs, this part is not, like
the other three, neceflarily withdrawn from it, in order to be placed
in the other. two branches of the general ftock of the fociety, it
muft, however, like all other things, be wafted and worn out at
laft, and fometimes too be either loft or fent abroad, and muft,
therefore, require continual, though, no doubt, much {maller
fupplies,

LAND, mines, and fifheries, require all both a fixed and a cir-
culating capital to cultivate them; and their’ produce replaces witlt

a profit, not only thofe capitals, but ail the others in the fociety.
Thus the farmer annually replaces to. the manufacturer the provi-
fions which he had confumed and. the materials which he had

wrought up the year before; and the manufacturer replaces to the

farmer the finifhed work which he had wafted and worn out in the
fame time. This is the real exchange that is annually made between
thofe two orders of people, though it feldom happens that the rude
produce of the one and the manufactured produce of the other,
are directly bartered for one another; becaufe it feldom happens
that the farmer fells his corn and his cattle, his flax and his wool,

to the very fame perfon of whom he chufes to purchafe the cloaths,.
furniture, and inftruments of trade which he wants. He’ fells,

therefore, his rude produce for money, with which he can purchafe;
wherever it is to be had, the manufactured produce he has occafion
: for.

fertil
catio
are ¢
natu:

In
comr
canc
If iti
for ir
profi
going
circul
is tol
manc
fome

In
afraic
conce
to ca:
threa!
felves
in Ti

THE WEALTH CF NATIONS.

339

for. Land even replaces, in part at leaft, the capitals with which CHAP.
fifheries and mines are cultivated. It is the produce of land ——~
which draws the fifh from the waters; and it is the produce
of the furface of the earth which extracts the minerals from its
bowels.

Tue produce of land, mines, and fifheries, when their natural
fertility is equal, is in proportion to the extent and proper appli-
cation of the capitals employed about them. When the capitals
are equal and equally well applied, it is in proportion to their
natural fertility.

In all countries where there is tolerable fecurity, every man of
common underftanding will endeavour to employ whatever ftock he
can command in procuring either prefent enjoyment or future profit.
If it is employed in procuring prefent enjoyment, it is a {tock referved
for immediate confumption. If it is employed in procuring future
profit, it muft procure this profit either by ftaying with him, or by
going from him. In the one cafe it is a fixed, in the other it is a
circulating capital. A man mutft be perfectly crazy who, where there
is tolerable fecurity, does not employ all the ftock which he com-
mands, whether it be his own or borrowed of other people, in
fome one or other of thofe three ways.

In thofe unfortunate countries, indeed, where men are continually
afraid of the violence of their fuperiors, they frequently bury and
conceal a great part of their ftock, in order to have it always at hand
to carry with thera to fome place of fafety in cafe of their being
threatened with any of thofe difafters to which they confider them-
felves as at all times expofed. This is faid to be a common practice
in Torkye in Indoftan, and, I believe, in moft other governments

Xx 2 of

34°

THE NATURE AND CAUSES OF

BOOK of Afia. It feems to have been acommon practice among our ancef-
wy tors during the violence of the feudal government. Treafure-trove

was in thofe times confidered as nocontemptible part of the revenue
of the greateft fovereignsin Europe. It confifted in fuch treafuzs as
was found concealed in the earth, and to which no particul:r perfon
could prove any right. This was regarded in thofe times as fo im-
portant an object, that it was always confidered as belonging to the
fovereign, and neither to the “nder nor to th2 proprietor of the land,
unlefs the right to it had been convey-d to the latter by an exprefs
claufe in his charter. It was put upon the fame footing with gold
and filver mines, which, without a fpecial claufe in the charter, were
never fuppofed to be comprehended in the general grant of the lands,
though mines of lead, copper, tin, and coal were, as things of
{maller confequence,

THE WEALTH OF NATIONS,

CHAP. I.

Of Money confidered as a particular Branch of the general Stock
of the Society, or of the Expence of maintaining the National
Capital,

T has been fhewn in the firft book, that the price of the greater
part of commodities refolves itfelf into three parte, of which

one pays the wages of the labour, another the profits of the ftock,
anda third the rent of the Jand which had been employed in pro-
ducing and bringing them to market: that there are, indeed, fome
commodities of which the price is made up of two of thofe parts
only, the wages of labour, and the profits of ftock: and a very
few in which it confifts altogether in one, the wages of labour:
but that the price of every commodity neceflarily refolves itfelf into
fome one or other or all of thefe three parts; every part of it which

goes neither to rent nor to wages, being neceflarily profit to fome-

body.

Since this is the cafe, it has been obferved, with regard to every
particular commodity, taken feparately; it muft be fo with re-
gard to all the commodities which compofe the whole annual
produce of the land and labour of every country, taken coimplexly.
The whole price or exchangeable value of that annual produce,
mutt refolve itfelf into the fame three parts, and be parcelled out
among the different inhabitants of the country, either as the
wages of their labour, the profits of their ftock, or the rent of
their land.

Bur

¥
ee

THE NATURE AND CAUSES OF

B So K Bur though the whole value of the annual produce of the land

we —— and labour of every country, is thus divided among and conftitutes
a revenue to its different inhabitants, yet as in the rent of a pri-
vate eftate we diftinguifh between the grofs rent and the neat rent,
fo may we likewife in the revenue of all the inhabitants of a great
country.

Tue grofs rent of a private eftate comprehends whatever is paid
by the farmer: the neat rent, what remains free to the landlord,
after deducting the expence of management, of repairs, and all
other neceflary charges; or what, without hurting his eftace, he
can afford to place in his {tock referved for immediate confurnption,
or to fpend upon his table, equipage, the ornaments o' his houfe
and furniture, his private enjoyments. and amufenients. His real
wealth is in proportion, not to his grofs, but to his neat rent,

‘He grofs revenue of all the inhabitants of a great country,
comprehends the whole annual produce of their land and labour :
the neat revenue, what remains free to them after deducting the
expence of maintaining; firft, their fixed; and, fecondly, their
circulating capital; or what, without encroaching upon their ca-
pital, they can place in their ftock referved for immediate con-
fumption, or fpend upon their fubfiftence, conveniencies and
amufements. Their real wealth too is in proportion, not to their
grofs, but to their neat revenue.

Tue whole expence of niaintaining the fixed capital, muft evi-
dently be excluded from the neat revenue of the fociety. Neither
the materials neceffary for fupporting their ufeful machines and
inftruments of trade, their profitable buildings, &c. nor the pro-
duce of the labour neceffary for fafhioning thofe materials into the
proper form, can ever make any part of it. The price of
that Jabour may, indeed, make a part of it; as the workmen fo

employed

THE WEALTH OF NATIONS.

employed may place the whole value of their wages in their ftock
referved for immediate confumption. But in other forts of
labour, both the price and the produce go to this ftock, the price
to that of the workmen, the produce to that of other people,
whofe fubfiftence, conveniencies, and amufements, are augmented
by the labour of thofe workmen.

THE intention of the fixed capital is to increafe the productive
powers of labour, or to enable the fame number of labourers to
perform a much greater quantity of work. In a farm where alf
the neceflary buildings, fences, drains, communications, &c. are
in the moft perfeét good order, the fame number of labourers and
labouring cattle will raife a much greater produce, than in one
of equal extent and equally good ground, but not furnifhed with
equal conveniencies. In manufactures the fame number of hands
aflifted with the beft machinery, will work up a much greater
quantity of goods than with more imperfect inftruments of trade.
The expence which is properly laid out upon a fixed capital of
any kind, is always repaid with great profit, and increafes the an~
nual produce by a much.greater value than that of the fupport
which fuch improvements require. This fupport, however, {till
requires a certain portion of that produce. A certain quantity of
materials, and the labour of a certain number of workmen, both
of which might have been immediately employed to augment the
food, cloathing, and lodging, the fubfiftence and conveniencies of
the fociety, are thus diverted to another employment, highly ad-
vantageous indeed, but {till different from this one. It is upon
this account that all fuch improvements in meehanicks, as enable
the fame number of workmen to perform an equal quantity of
work, with cheaper and fimpler machinery than had been ufual.
before, are always regarded as advantageous to. every fociety. A
certain quantity of materials, and the labour of a certain number

7 of

343
C HA P,
—

344

THE NATURE AND CAUSES OF

B oe K of workmen, which had before been employed in fupporting a
wa more complex and expenfive machinery, can afterwards be ap-

plied to augment the quantity of work which that or any other
machinery is ufeful only for performing. The undertaker of fome
great manufactory who employs a thoufand a-ycar in the main-
tenance of his machinery, if he can reduce this expence to five
hundred, will naturally employ the other five hundred in pur.
chafing an additional quantity of materials to be wrought up by
an additional number of workmen. The quantity of that work,
therefore, which his machinery was ufeful only for performing,
will naturally be augmented, and with it all the advantage and
conveniency which the fociety can derive from that work.

Tue expence of maintaining the fixed capital in a great country,
may very properly be compared to that of repairs in a private eftate.
The expence of repairs may frequently be neceflary for fupporting
the produce of the eftate, and confequently both the grofs and the
neat rent of the landlord. When by a more proper dire€tion,
however, it can bediminifhed without occafioning any diminution
of produce, the grofs rent remains at leaft the fame as before, and
the neat rent is neceffarily augmented.

Bur though the whole expence of maintaining the fixed capital
is thus neceffarily excluded from the neat revenue of the fociety,
it is not the fame cafe with that of maintaining the circulating ca-
pital. Of the four parts of which this latter capital is compofed,
money, provifions, materials, and finifhed work, the three laft,
ithas already been obferved, are regularly withdrawn from it, and
placed either in the fixed capital of the fociety, or in their ftock
referved. for immediate confumption. Whatever portion of thofe
confumable goods is not employed in maintaining the former,
goes all to the latter, and makes a part of the neat revenue of the
fociety.

THE WEALTH OF NATIONS, 345

fociety. The maintenance of thofe three parts of the circulating ony P,
eapital, therefore, withdraws no portion of the annual produce yw
from the neat revenue of the fociety, befides what is neceffary for

maintaining the fixed capital.

Tue circulating capital of a fociety is in this refpect different
from that of an individual. That of an individual is totally ex-
cluded from making any part of his neat revenue, which muft con-
fift altogether in his profits. But though the circulating capital ’
of every individual, makes a part of that of the fociety to which.

he belongs, it is not upon that account totally excluded from

making a part likewife of their neat revenue. Though the whole

goods in a merchant’s fhop muft by no means be placed in his

own. ftock referved for immediate confumption, they may in that

of other people, who from a revenue derived from other funds,

may regularly replace their value to him together with its profits,

without occafioning any diminution either of his capital or of.

their’s.. ;

Money, therefore, is the only part of the circulating capital.
of a fociety of which the maintenance can occafion any diminution:
in their neat revenue...

Tue fixed capital, and that: part of the circulating capital whicly:
confifts in money, fo far as they affect the revenue of the fociety,.
bear avery great refemblance to one another, .

First, as thofe machines: and inftruments of’ trade, &c. re-
quire a certain expence firft to erect them and afterwards to fupport.
them, both-which expences, though they make'a pait of the grofs,.
are deduétions from.the neat revenue of the fociety; fo the {tock
of money. which. circulates. in.any.country muft require a certain.
Vou. I, Y y expence,,

246 THE NATURE AND CAUSES OF

BOOK expence, firlt to colleétit, and afterwards to fupport it, both which

| expences, though they make a part of the grofs, are, in the fame pout
manner, deductions from the neat revenue of the fociety. A cere ye
tain quantity of very valuable materials, gold and filver, and of eight
very curious labour, inftead of augmenting the ftock referved for be

immediate confumption, the fubfiftence, conveniencies, and amufe- fa
ments of individuals, is employed in fupporting that great but PP

A . that: man
expenfive inftrument of commerce, by means of which every indi-

vidual in the fociety has his fubfiftence, conveniencies, and amufe~ vate
ments, regularly diftributed to him in their proper proportions, piles

SECONDLY, as the machines and inftruments of trade, &c, which what
compofe the fixed capital either of an individual or of a fociety, qualt
make no part either of the grofs or of the neat revenue of either; bass
fo money, by means of which the whole revenue of the fociety is W.
regularly diitributed among all its different members, makes itfelf expre
no part of that revenue, The great wheel of circulation is alto- but t
gether different from the goods which are circulated by means goods
of it. The revenue of the fociety confifts altogether in thofe goods, variue
and not in the wheel which circulates them. In computing either valaai

the grofs or the neat revenue of any fociety, we muft always, from
their whole annual circulation of money and goods, deduct the
whole value of the money, of which not a fingle farthing can ever
make any part of either. T

fame
to the

he ca

"Ir is the ambiguity of language only which can make this pro- ef fu
pofition appear either doubtful or paradoxical. When properly this q
explained and underftood, it is almoft felf-evident. reven
- guineg

Wuen we talk of any particular fum of money, we fometimes or otl
mean nothing but the metal pieces of which it is compofed; and perly
fometimes we include in our meaning fome obfcure reference to gui
the

THE \“"EALTH OF NATIONS,

347

the goods which can be had in exchange for it, or to the power of © HA P.
purchafing which the poffeffion of it conveys. ‘Thus when we fay, ——

that the circulating money of England has been computed at
eighteen millions, we mean only to exprefs the amount of the
metal pieces, which fome writers have computed or rather have
fuppofed to circulate in that country. But when we fay that a
man is worth fifty or a hundred pounds a-year, we mean com-
monly to exprefs not only the amount of the metal pieces which:
are annually paid to him, but the value of the goods which he can
annually purchafe or confume. We mean commonly to afcertain
what is or ought to be his way of living, or the quantity and
quality of the neceffaries and conveniencies of life in which he
can with propriety indulge himfelf,

Wuen, by any particular fum of money, we mean not only to
exprefs the amount of the metal pieces of which it is compofed,
but to include in its fignification fome obfcure reference to the
goods which can be had in exchange for them, the wealth or re-
venue which it in this cafe denotes, is equal only to one of the two:
values which are thus intimated fomewhat ambiguoufly by the:
fame word, and to the latter more properly than to the former,,
to the money’s-worth more properly than to the money.

Tuus if a guinea be the weekly penfion of a particular perfon,,
he can in the courfe of the week purchafe with it a certain quantity:
ef fubfiftence, conveniencies, and amufements.. In proportion as.
this quantity is great or finall, fo are his real riches, his real weekly’
revenue. His weekly revenue is certainly ot equal both to the
guinea, and. to what can be purchafed. with it, but only to one
or other of thofe two equal values ; and to the latter. more pro-
perly than to the former, to.the guinea’s-worth rather than to the
guinea.

Yy2 Tr

348 THE NATURE AND CAUS1;5 OF

B oP K Ir the penfion of fuch a perfon was paid to him, not in gold, the 1
b\w but in a weekly bill for a guinea, his revenue furely would not fo preci
properly confift in the piece of paper, as in what he could get for and

it. A guinea may be confidered as a bill for a certain quantity piece

of neceffaries and conveniencies upon all the tradefinen in the ven
neighbourhood. The revenue of the perfon to whom it is paid, weck

does not fo properly confift in the piece of gold, as in what he can mor'

get for it, or in what he can exchange it for. If it could be ex- meta

changed for nothing, it would, like a bill upon a bankrupt, be of ‘be of

no more value than the moft ufelefs piece of paper. ‘with

fucee

‘Tuovcu the weckly, or yearly revenue of all the different in- they

habitants of any country, in the fame manner, may be, and in valu

reality frequently is paid to them in money, their real riches, how- diffe!

ever, the real weekly or yearly revenue of all of them taken to- fore,

gether, muft always be great or fmall in proportion to the quan- fo m

tity of confumable goods which they can all of them purchafe with the §

this money. The whole revenue of all of them taken together is culat

evidently not equal to both the money and the confumable goods ;
but only to one or other of thofe two values, and to the latter
more properly than to the former.

Tuoucn we frequently, therefore, exprefs a perfon’s revenuc
by the metal pieces which are annually paid to him, it is becaufe
the amount of thofe pieces regulates the extent of his power of
purchafing, or the value of the goods which he can annually af-
ford to confume. We ftill confider his revenue as confifting in
this power of purchafing or confuming, and not in the pieces
which convey it.

Bur if this is fufficiently evident even with regard to an indivi-
dual, it is ftill more fo with regard to a fociety. The amount of
the

THE WEALTH OF NATIONS,

‘the metal pieces which are annually paid to an individual, is often CHAP.
precifely equal to his revenue, and is upon that account the fhortelt —~—~

and beft expreffion of its value. But the amount of the metal
pieces which circulate in a fociety, can never be equal to the re-
venue of all its members. As the fame guinea which pays the
weckly penfion of one man to-day, may pay that of another to-
morrow, and that of a third the day thereafter, the amount of the
metal pieces which annually circulate in any country, muft always
‘be of much lefs value than the whole money penfions annually paid
with them, But the power of ‘purchafing, the goods which can
fucceflively be bought with the whole of thofe money penfions as
they are fucceffively paid, muft always be precifely of the fame
value with thofe penfions; as muft likewife be the revenue of the
different perfons to whom they are paid. That revenue, there-
fore, caiuct vonfitt in thofe metal pieces, of which the amount is
{o much inferior to its value, but in the power of purchafing, in
the goods which can fucceflively be bought with them as they cir-
‘culate from hand ‘to hand.

Money, therefore, the great wheel of circulation, the great
gnftrument of commerce, like all other inftruments of trade,
though it makes a part and a very valuable part of the capital,
makes no part of the revenue of the fociety to which it belongs;
and though the metal pieces of which it is compofed, in the courfe
of their annual circulation, diftribute to every man the revenue
which properly belongs to him, they make themfelves no part of
that revenue,

Tuirpiy, and laftly, the machines and inftruments of trade,
&c. which compofe the fixed capital, bear this further refemblance
to that part of the circulating capital which confifts in money;
that as every faving in the expence of erecting and fupporting thofe
! machines,

35°

THE NATURE AND CAUSES OF

BO ie K machines, which does not diminifh the productive powers of labour,
geese is an improvement of the neat revenue of the fociety; fo every faving

in the expence of colle€ting and fupporting ‘that part of the cir-
culating capital which confifts in money, is an improvement of
exactly the fame kind.

Ir is fufficiently obvious, and it has partly too been. explained’
already, in what manner every faving in the expence of fupportin»
the fixed capital is an improvement of the neat revenue of the
fociety. The whole capital of the undertaker of every work is necef-
farily divided between his fixed and his circulating capital. While his.
whole capital remains the fame, the fmaller the one part, the greater
mutt neceffarily be the other. It is the circulating capital which.
furnifhes the materials and wages of labour, aad puts induftry into.
motion. Every faving, therefore, in the expence of maintaining
the fixed capital, which does not diminifh the produétive powers
of labour, muft mcreafe the fund which puts induftry into motion,
and confequently the annual produce of land and jabour, the real
revenue of every fociety.

Tue fubftitution of paper in the room of gold and filver money,
replaces a very expenfive inftrument of commerce. with one much
lefs coftly, and fometimes ‘equally convenient. Circulation comes
to be carried on by a new wheel, which it cofts lefs both to erect
and tomaintain than the old one. But in what manner this opera-
tion is performed, and in what manner it tends to increafe
either the grofs or the neat revenue of the fociety, is not
altogether fo obvious, and may therefore require fome further
explication.

TueEre are feveral different forts of paper money ; but the circu-
Jatmg notes of banks and bankers are the fpecies which is betft
known, and which feems beft adapted for this purpofe,

7 WHEN

eee) ae ee OE ere are

THE WEALTH OF NATIONS,

Wuen the people of any particular country have fuch con-
fidence in the fortune, probity, and prudence of a particular
banker, as to beljeve that he is always ready to pay upon demand
fach of his promiffary notes as are likely to be at any time prefented
to him; thofe notes come to have the fame currency as gold and
filver money, from the confidence that fuch money can at any time
be had for them. :

A paRTicuLAR banker lends among his cuftomers his own
promiffary notes, to the extent, we fhall fuppofe, of a hundred
thoufand pounds. . As thofe notes ferve all the purpofes of money,

“his debtors pay him the fame intereft as if he had lent them fo much

money. This intereft is the fource of his gain. ‘Though fome of
thofe notes are continually coming back upon him for payment,
pact of them continue to circulate for months and years together.
Though he has generally in circulation, therefore, notes to the
extent of a hundred thoufand pounds, twenty thoufand pounds in
gold and dilver may, frequently, be a fufficient provifion for an-
{wering occafional demands. By this operation, therefore, twenty
thoufand pounds in gold and filver perform all the functions which
a hundred. thoufand could otherwife have performed. The
fame exchanges miy be made, the fame quantity of confumable
goods may be circulated and diftributed to their proper confumers,
by means of his promiffary notes, to the value of a hundred thou-
fand pounds, as by an equal value of gold and filver money. Eighty
thoufand pounds of gold and filver, therefore, can, in this manner,
be {pared from the circulation of the country; and if different
operations of the fame kind, fhould, at the fame time, be carried
‘on by many different banks and bankers, the whole circulation may
thus be conducted with a fifth part only of the gold and filver which
would otherwife have been requifite.

Ler

351
CHAP.
Ik.
henrmyoted

352
BOOK

eee

THE NATURE AND CAUSES OF

Let us fuppofe, forexample, that the while circulating money:
of fome particular country amounted, at a particular time, to one:
million fterling, that fum being’ then fufficient for circulating the
whole annual produce: of their land and: labour.

and filver, and a million. of. bank notes, or, eighteen hundred
thoufand pounds of paper and money. together.. But the annual

produce of the land:and labour. of the country ‘had before required.

only one million to circulate. and diftribute. it to its. proper
confumers,. and:that annual produce: cannot be immediately aug-
mented by thofe operations of banking. One. million, therefore,
will be {ufficient to circulate it after them. The goods to be bought
and fold. being precifely the fame. as before; the fame quantity of
money will’ be fufficient for buying and felling them. The
channel of circulation, if I may be allowed fuch an expreffion, will
remain precifely the fame as before.. One million we have fuppofed
fufficient to fill that channel, Whatever, therefore, is poured
into it beyond this fum; cannot.run in it, but muft overflow.. One
million eight hundred thoufand pounds.are poured into it.. Eight
hundred thoufand. pounds, therefore, muft. overflow, that fum
being over and above what can be employed.in the circulation of the
country. But though this fum cannot be employed:at home, it is
too valuable to be allowed to lie idle. It will, therefore, be fent
abroad, in order to. feek that profitable employment. which. it
cannot find at home. But the paper cannot go abroad ; becaufe at
a diftance from the banks which iffue it, and from the country in
which payment of it can be exacted by. law, it will not be
received in common payments, Gold and filver, therefore, to the
amount

Let. us fuppofe-
too, that fome time’thereafter, different banks and‘ bankers iffued.
promiflary notes, payable to the bearer, to the extent of one.
million, referving in their different coffers two hundred- thoufand:
pounds for anfwering occafional demands. ‘There. would remain,.
therefore;. in circulation, eight hundredthoufand pounds in gold:

incre
or ef
and
ay)

THE WEALTH OF NATIONS.

zmount of eight hundred thoufand pounds will be fent abroad, and
the channel of home circulation will remain filled with a million
of paper, inflead of the million of thofe metals which filled it
before.

Burt though fo great a quantity of. gold and filver is thus fent
abroad, we muft not imagine that it is fent abroad for nothing, or
that its proprietors make a prefent of it to foreign nations. They
will exchange it for foreign goods of fome kind or another, in order
to fupply the confumption either of fome other foreign country «.
of their own.

Ir they employ it in purchafing goods in one foreign country
in order to fupply the confumption of another, or in what is called
the carrying trade, whatever profit they make will be an addition to
the neat revenue of their own country. It is like a new fund, created
for carrying on a new trade; domeftick bufinefs being now tranf-
acted by paper, and the gold and filver being converted into a fund
for this new trade.

Ir they employ it in purchafing foreign goods for home con-
fumption, they may either, firft, purchafe fuch goods as are likely
to be confumed by idle people who produce nothing; fuch as foreign
wines, foreign filks, &c.; or, fecondly, they may purchafe an
additional ftock of materials, tools, and provifions, in order to
maintain and employ an additional number of induftrious people,
who re-produce, with a profit, the value of their annual con-
fumption.

So far as it is employed in the firft way, it promotes prodigality,
increafes expence and confumption without increafing production,
or eftablifhing any permanent fed for fupporting that expence,
and is in every refpect hurtful to the fociety.
~ Vou. I. Zz So

3538
oer

594
BOOK
— a J

THE NATURE AND CAUSES OF

So far as it is employed in the fecond way, it'promotes induftry ;
and though it increafes the confumption of the fociety, it provides
a permanent fund for fupporting that confumption, ‘the people whd
confume, re-producing, with a profit, the whole value of their
annual confumption. The grofs revenue of the fociety, the annual
produce of their land and labour, is inéreafed by the whole value
which the labour of thofe workmen adds to the materials upon which
they are employed; and their neat revenue by what remains of
this value, after deducting what is neceflary for fupporting the
tools and inftruments of their trade..

TuatT the greater part of the gold and filver which, being forced’
abroad by thofe operations of banking, is employed in purchafing
foreign goods for home confumption, is and. muft be employed
in purchafing thofe of this fecond kind, feems, not only probable,
but almoft unavoidable. Though fome particular men may fome-
times increafe their expence very confiderably though their revenue

does not increafe at all, we may be affured that no clafs or orde:
of men ever does fo; becaufe, though the principles of common.
prudence do not always govern the conduct of every individual,
they always influence that of the majority of every clafs or order.
But the revenue of idle people, confidered as a clafs or order,
cannot, in the fmalleft degree, be <icreafed by thofe operations of
banking. Their expence in general, therefore, cannot be much.
increafed by them, though that of a few individuals among them
may, and in reality fometimes. is. The demand .of idle. people,
therefore, for foreign goods, being the fame, or verv nearly the
fame, as before, a very fmall part of the money, which being forced
abroad by thofe operations of banking, is employed in purchafing
foreign goods for home confumption, is likely to be employed in .
purchafing thofe for their ufe. The greater part of it will naturally

THE WEALTH OF NATIONS,

355

be deftined for the employment of induftry, and not for the main- C a

tenance of idienefs,

WHEN we compute the quantity of induftry which the cir

culating capital of any fociety can, employ, we -muft always: have:

regard to thofe parts of it only, which confift in provifions, mates
rials, and finifhed work: the other, which confifts in money, and
which ferves only to circulate thofe three, muft always be deducted.
In order to put induftry into motion, three things are requifite ;
materials to work upon, ‘sols to work with, and the wages or
recompence for the fake of which the, work is done. Money is
neither a material to work upon, nor a. tool to. work with; and
though the wages of the workman are commonly paid to him in
money, his real revenue, like that of all other men,, confifts, not in

the money, but in the money’s worth ; not in the metal pieces, but
in what-can be got for them.

Tue, quantity of induftry which any capital can employ, muft,
evidently, be equal to the number of workmen whom it can fupply
with materials, tools, and a maintenance fuitable to: the nature of
the work. Money. may be requifite for purchafing the mate-
rials and tools of the work, as well as the maintenance of the
workmen. But the quantity of induftry which the whole. capital
can employ, is certainly not equal both to the money which pur-
chafes, and to the materials, tools, and maintenance, which are
purchafed with it; but only to one or other of thofe twa values,
and to the latter more properly than to the former,

Wuen paper is fubftituted in the room of gold and filver money,
the quantity of the materials, tools, and maintenance, which the
whole circulating capital can fupply, may be increafed by the whole
value of gold and filver which ufed to be employed in purchafing

ZZ 2 them,

Tam, Hd

356

THE NATURE AND CAUSES OF

BOOK them. The whole value of the great wheel of circulation and
t— diftribution, is added to the goods which are circulated and

diftributed by means of it. The operation, in fome meafure, re-
fembles that of the undertaker of fome great work, who, in confe-
quence of fome improvement in mechanicks, takes down his old
machinery, and adds the difference between its price and that of
the new to his circulating capital, to the fund from which he fur-
nifhes materials and wages to his workmen.

Wuar is the proportion which the circulating money of any
country bears to the whole value of the annual produce circulated
by means of it, it is, perhaps, impoflible to determine. It has
been computed by different authors at a fifth, at a tenth, at a
twentieth, and at a thirtieth part of that value. But how fmall
foever the proportion which the circulating money may bear
to the whole value of the annual produce, as but a part, and fre-

quently but a fmall part, of that produce, is ever deftined for the:

maintenance of induftry, it muft always bear a very confiderable
proportion to that part. When, therefore, by the fubftitution of
paper, the gold and filver neceffary for circulation is reduced to,
perhaps, a fifth part of the former quantity, if the value of only
the greater part of the other four-fifths be added to the funds which
are deftined for the maintenance of induftry, it muft make a very
confiderable addition to the quantity of that induftry, and, con-

fequently, to the value of the annual produce of land and.

labour.

AN operation of this kind has, within thefe five and’ twenty or
thirty years, been performed in Scotland, by the erection of new
banking companies in almoft every confiderable town, and even in
fome courftiy villages. The effects of it have been precifely thofe
above defcribed. The bufinefs of the country is: almoft. entirely

carried.

wa @ & th ® 4 CF eo @ O- 2

THE WEALTH OF NATIONS,

357

cattied on by means of the paper of thofe different banking CHAP.
companies, with which ‘‘purchafes and payments of ‘all kinds’ Uys

are commonly made, Silver very feldom appears, except in the
change of a twenty fhitlings bank note, and gold {till feldomer.
But though the conde of all thofe different companies ‘has not
been’ wnexceptionable,' and ‘has ‘accordingly required an aét of
parliament to regulate it; the country, notwithftanding, has.
evidently derived great benefit from their trade. I have heard it
afferted, that the trade of the city of Glafgow doubled in about
fifteen years after the firft erection of the:banks there ;. and that: the
trade of Scotland has'‘more than quadrupled fince the firft ereftion
of the two publick banks at Edinburgh, of which the one, called
The Bank of Scotland, was: eftablifhed by .act of parliament in
1695, the other, called The Royal Bank, by royal charter in:
1727. Whether the trade; either of Scotland in general, or of
the city of Glafgow in. particular; has really inereafed in fo great
a proportion, during fo fhort a period, I do not pretend to
know. If either of them has increafed in this proportion, it feems
to be an effect too great to be accounted ifor by the fole operation
of ‘this; caufe. ‘That the trade and. induftry ‘of: Scotland, however»
have increafed very confiderably ‘during this period, and that
the banks have contributed a good deal to: this increafe, cannot
be doubted.

Tur value of the filver money which circulated in. Seotland:
before the umion, in 1707, and which immediately after it. was.
brought into the bank of S¢otland im order to be re-coined,.
amounted to 411,1171. ros. gd. fterling. No. account has. been:
got of the gold coin ;, but it appears from the antient accounts of
the mint of Scotland,, that the value of the gold annually coined.
fomewhat exceeded that of the filver*. There were a good many.
people too upon this occafion, who, from a diffidence of rer

* See Rudiman’s Preface to Anderfon’s Diplomata, &c. Scotiz..
Vor. I. 2 Z 3 payment,

THEO NATYREOAND IGAUSES: OF

BOOK payment, did met:bring: their Giver into the bank of Sootland:s od
keemyse iliere) wee," -bofidess; fome Englith coin, which :was. not called

ins ‘The whole, value; of the, gold and filver; therefore, ;,.which,.
circulated in Scotland before the union, cannot, be, eftimated,, at;
lefs than a million, fterling,. It feems to have conftituted almek:
the whole circulation of that country; for though, the. ¢isculation,
of the, bank of Scotland, which had, then: no..sival, .was con-.
fiderable, it feems to have’ made but a, very {mall part . of the,
whole. In the prefent times. the whole, circulation of ; Scotland.
cannot be eftimated at lefs. than two millions, of ,»which thaf-part.
which confifts in gold and: filver,, moft: probably, doesnot amount:
to half a:million. | But though the circulating gold:and.:filver, of .
Scotland have fuffered :fo great .a diminution. during. this::period,
its real riches and profperity do: mot appear:ito: have fuffered.any.s::
Its agriculture, manufactures, and:trade; non: the:contrary,i.the
annual: produce: ofi its land::and:: labour, aihave,/-evideatly, been
augmented. [ weiter sotted) obs Merah yep x
Ir is chiefly by difcounting bills of exchange, ‘that is, by ad-
vancing- money upon: them. before they are due, that the gredtét
pait of banks and bankers, iffue ‘their \promiffory ‘notes. ‘They
déduét atways, upon whatever fum ‘they advance, thé ‘legal
initereft till the bill fhall become due. The payment! of he’
bill,’ When ‘it becomes due, replaces to the bank the ‘value “of”
what iad “beer ‘advaiiced; tdgéther’ with a ‘clear’ profit” of the:
iritereft. “Phe Banker who! advances to’ the “therthahit’ WHofe
bill “he difcounts, ‘not’ gold and filver, but his own’ promiffory
notes, ‘has the advantage of being able to: difcount td ‘a ‘greater
amount, bythe Whole ‘Value Of his promiffoly notes) ‘whith”he
finds by experierice,’ aré' comiionly in cifculation. * He is thereby
eniabled to ‘make’ his’ clea’ gain of intéreft' on’ fo ° miich’
larger fom, Oe ponent eens

THE

THE WEALTH OF NATIONS,

Tue commerce of Scotland, which at prefent is not very great,
was ‘ftill more inconfiderable when the two firft banking com-
panies were eftablifhed ; and thofe companies would have had but

little trade, had they confined their bufinels to the difcounting of
bills of exchange. They invented, therefore, another method of

iffuing their promiffary notes ; by granting, what they called, cafh.
Accounts, that is, by giving credit to the extent of a certain fum, ,
(two or three thoufand pounds, for example), to any individual :
who could procure two pérfons of undoubted credit and good landed:
eftate to become furety for him, that whatever money fhould be:

4dvanced to him, within the fum for which the credit had been

given, fhould be repaid upon demand, together with the legal .
intéreft, Credits of this kind are, I believe, commonly granted by:

banks and bankers in all different parts of the world. But the
eafy terms upon which the Scotch banking companies accept of

re-payment are, fo far as I know, peculiar to them, and have, .

perhaps, been the principal caufe, both of the great trade of thofe

companies, and of the benefit which the country has received :

from it.

Wuoever has a credit of this kind with one of thofe companies, .
and borrows a-thoufand pounds upon it, for example, may repay °

this fum piece-meal, by twenty and thirty pounds at a time, the
company difcounting a proportionable part of the intereft of the
great fum from the day on which each of thofe fmall fums is paid

in, till the whole be in this manner repaid. All merchants, there-

fore, and almoft all men of bufinefs, . find it convenient to keep
fach cafh accounts with them, and are thereby interefted to pro-
mote the trade. of thofe companies, by readily receiving their notes
in all payments, and by encouraging all thofe with whom they
have any influence todo the fame. The banks, when their cuftomers
apply to them for money, generally advance it to them in their own

promiflary,

359
CHAP,
~—4 eo?

360 THE NATURE AND CAUSES OF

ah Sg K promiffary notes. Thefe the merchants pay away to the manu- five
t——— 1 facturers for goods, the manufacturers. to the farmers for mate- me
rials and provifions, the farmers to their laidlords for rent, the un
landlords repay them to the merchants for the conveniencies and act

luxuries with which they fupply them, and the merchants again wit

:eturn them to the banks in order to balance their cafh accounts, mo:

or to replace what they may have borrowed of them; and thus goo

almoft the whole money bufinefs of the country is tranfacted hav

by means of them. Hence, the great trade of thofe companies, tha

| pro

By means of thofe cafh accounts every merchant can, without of
imprudence, carry on a greater trade than he otherwife could do. He

If there are two merchants, one in London, and the other in trad

Edinburgh, who employ equal ftocks in the fame branch of trade,
the Edinburgh merchant can, without imprudence, carry on a
greater trade, and give employment to a greater number of people
than the London merchant. The London merchant muft always
keep by him a confiderable fum of money,. either in his own
coifers, or in thofe of his banker, who gives him no intereft for
it, in order to anfwer the demands continually coming upon
him for payment of the goods which he purchafes upon credit. Let
the ordinary amount of this fum be fuppofed five hundred pounds.
The value of the goods in his warehoufe muft always be lefs by
five hundred pounds than it would have been, had he not been
obliged to keep fuch a fum unemployed. Let us fuppofe that
he generally difpofes of his whole ftock upon hand, or of
goods to the value of his whole ftock upon hand, once in the
year. By being obliged to keep fo great a fum unemployed, he
muft fell in a year five hundred pounds worth lefs goods than he
might otherwife have done. His annual profits muft be lefs by
all that he could have made by the fale of five hundred pounds
worth more goods ; and the number of people employed in pre-
paring his goods for the market, mutt. be lefs by all thofe that
five

ano"

THE WEALTH OF NATIONS.

five hundred pounds more ftock could have employed. The ‘CH

361

AP.
1,

merchant in Edinburgh, on the other hand, keeps no money —-y—

unemployed for anfwering fuch occafional demands. When they
actually come upon him, he fatisfies them from his cafh account
with the bank, and gradually replaces the fum borrowed with the
money or paper which comes in from the occafional fales of his
goods. With the fame ftock, therefore, he can, without imprudence,
have at all times in his varehoufe a larger quantity of goods

than the London me: ~ nd can thereby both make a greatex
profit himfelf, and gi employment to a greater number
of induftrious people »-pare thofe goods for the market.

Hence the great benefit which the country has derived from this
trade,

Tue facility of difcounting bills of exchange, it may be thought
indeed, gives the Englifh merchants a conveniency equivalent
to the cafh accounts of the Scotch merchants. But the Scotch
merchants, it muft be remembered, can difcount their bills of ex-
change as eafily as the Englifh merchants; and have, befides, the
additional conveniency of their cafh accounts,

Tue whole paper money of every kind which can eafily circu-
late in any country never can exceed the value of the gold and
filver, of which it fupplies the place, or which (the commerce
being fuppofed the fame) would circulate there, if there was no
paper money. If twenty fhilling notes, for example, are the
loweft paper money current in Scotland, the whole of that cur-
rency which can eafily circulate there cannot exceed the fum
of gold and filver, which would be neceflary for tranfacting
the annual exchanges of twenty fhillings value and upwards
ufually tranfaéted within that country. Should the circulating
paper at any time exceed that fum, as the excefs could neither

Vou. I. 3A be

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363

BGOas
beonyeed

THE NATURE AND CAUSES OF

be fent abroad nor be employed in the circulation of the country, it
muft immediately return upon the banks to be exchanged for
gold and filver. Many people. would immediately perceive that
they had more of this paper than was neceffary for tranfacting
their bufinefs at home, and as they could not fend: it- abroad,
they would immediately demand payment of it from the banks,
When this fuperfluous paper was converted into gold and filver,
they could eafily find a ufe for it by fending it abroad; but they.
could find none while it remained in the fhape of paper. There
would immediately, therefore, be a run upon the banks to the
whole extent of this fuperfluous paper, and, if they fhowed any
difficulty or backwardnefs in payment, to a much greater extent ;
the alarm, whiich this would. occafion, neceffarily increafing the
run.

Over and above the expences which are common to every:
branch of trade; fuch as the expence. of houfe-rent, the wages
of fervants, clerks, accountants, &c.; the expences peculiar to a
bank confift chiefly in two articles :. Firft, in.the expence of keep-
ing at all tiraes in its coffers, for an{wering the occafional demands
of the holders of its notes, a large fum of money, of which it
lofes the. intereft: And, fecondly, in the. expence of. replenifhing:
thofe coffers as faft as they are emptied by anfwering fuch occas
fional demands,

| Ne es company. which iffues more. paper than can_ be
employed in the circulation of the country, and of which. the
excefs is continually returning upon them for.payment, ought to
increafe the quantity of gold and filver, which they keep at all
times in. their coffers, not only. in.proportion to .this. exceflive

‘increafe_ of their circulation,. but in a much greater proportion ;

their notes returning upon them much fafter than in proportion
: 4. i toi &@

“THE WEALTH OF NATIONS,

363

to ithe excefs of their quantity. Such a company, therefore, C BA P.
ouglit to increafe the firft article of their expence, not only in C-+—
proportion to this forced increafe of their bufinefs, but in a much
greater proportion.

Te coffers of fuch a company too, though they ought to
be filled ‘much fuller, yet muft empty themfelves much fafter than
if their bufinels was confined within more reafonable bounds, and
muft require, not only a more violent, but a more conftant and
uninterrupted’ exertion of expence in order to replenifh them.
The coin too, which is thus continually drawn in fuch large
quantities from their coffers, cannot be employed in the circula-
tion of the country. It comes in place of a paper which is over
and above what can be employed in that circulation, and is there-
fore, over and above what can. be employed in it too. But as
that coin will not be allowed to lie idle, it muft, in one fhape
or another, be fent abroad, in order to find that profitable employ-
ment which it cannot find at home; and this continual exportation
of gold and filver, by enhancing the difficulty, muft. neceffarily
enhance {till further the expence of the bank, in finding new
gold and filver in order to replenith: thofe coffers, which empty
’ themfelves fo very rapidly. Such a company, . therefore, mutt,

in proportion to this forced increafe of their bufinefs, increafe

the fecond article of their expence ftill more than the firft,

Let us fuppofe that all the paper of a particular bank, which the
circulation of the country can eafily abforb and employ, amounts
exactly to forty thoufand pounds; and that for.anfwering occafional
demands, this bank is obliged to keep at all times in its: coffers ten
thoufand. pounds in gold and filver. Should this bank, attempt
to circulate forty-four thoufand pounds, the four thoufand pounds
which are over and above what the circulation can eafily abforb
3A2 and

’
i

THE NATURE AND CAUSES OF

99K and employ, will. return upon it almof as fak as they are iffued:
=4 For anfwering occeafional demands, therefore, this bank ought to

keep at all times in ite coffers, nat-cleven thoufand pounds. only,.
but fourteen thoufand pounds. It will thus gain nothing by
the intereft of the four thoufand pounds exceffive circulation ;
and it will lofe the whole expence of continually collecting four
thonfand pounds in gold. and filver which-.will be continually:
going out of its coffers as faft as they are itch into.them.:

Hap every particular banking company prin shaded and
attended to its .qwn particular, imtereft, the circulation never.
could have been overftocked with: paper money. But: ‘every: par-
ticular banking company has not always underftood or attended
to. its own. particular intereft, and the circulation has ee
been, overftocked. with papex money.

By iffuing too great a quantity of paper, of which the excefs
_ was continually returning, in order to be exchanged for gold and
filver, the bank of England was for many years:together obliged to
coin gold to the extent of between ¢ight hundred thoufand pounds
and a.million a year; or. at an.average, about eight hundred and fifty
thoufand pounds. For this great coinage, the bank (i* nfe-
quence. of the worn. and degraded ftate into which the ¢ . coin
had fallen-a few: years ago) was frequently obliged to purchafe gold
bullion at the high price of four pounds ar ounce, which it
foon | after iffued in. coin sat 31,178. 1od.; ar. ounce, lofing in
this manner between. two and a half and three per cent. upon
the coinage of fo very large a fum. ‘Though the bank there-
fore: ‘paid no feignorage, ‘though the. government was properly
at ithe expence: of’ the coinage, this liberality’ of fA tsi
did not prevent vents sant the orn of the bank,

Tue

cafe the
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they wa
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and: aii
which t!
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éorrefpo
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tereft a
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extream
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THE
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their pa
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what cq
abroad.
abroad,
fold to

THE WEALTH OF NATIONS,

365

Tuz Scotch banks, in confequence of an excefs'of the’ fame C nh P,
kind, were all obliged to employ conftantly ' agents at Loridon ae

to collet money for them; at an expénce which was feldom below:

one anda half or two per cent. ‘Fhis moticy was fent down
by the waggon,. and infured by. the carriers at an additional expence
of' three quarters per cent. or fifteen fhillings‘on the hundred

pounds, ‘Thofe agents. were not always able to replenifh the
coffers’ of their employers fo faft'as they were emptied. In this.

cafe the refource of the banks was, to draw upon their correfpon-

dents in London bills of exchange to the extent of the fum which:

they wanted. ‘When: thofe. correfpondents afterwards drew upon

them for the payment of this fum, together with: the: intcreft,.
and’ a'commiffion; fome: of thofe banks, from the diftrefs into-
whieh: their exeeffive circulation had thrown them; had fometimes:
no other’ means. of fatisfying this draught but by drawing a:
fecond: fett of bills either upon the fame, or upon fome other

éorrefpondents in: London; and-the fame fum, or rather bills for

the fame fum; would in this manner make fometimes more than:

two or three journies; the debtor, bank, paying always the in-

tereft and commiffion upon: the whole accumulated fum. Even:
thofe Scotch banks which never diftinguifhed themfelves by their
extream imprudence,: were fometimes obliged to employ. this ruinous:

refource..

THe gold coin which was: paid out either by’ the bank of
England, or by the Scotch banks, in exchange. for that part of

their paper which was: over and above what could be employed.
in the circulation of the country, being likewife over and above:

what could be employed in that circulation, was fometimes fent
abroad. in, the fhape. of coin, fometimes melted down, and fent

abroad, in. the fhape of bullion, and fometimes melted down and.
fold to the bank of England at the high price of four pounds.
7 an:

THE NATURE AND ‘CAUSES OF

an ounce. .It .was the-neweft, the heavieft, ‘and: the. beft.. pieces
only which were carefully picked out.of the whole coin, and either
fent abroad vor melted down. .At home, and while they remained
in the fhape of coin, thofe heavy pieces were of no more value
‘than thelight ; But they were of more value abroad, or when melted
down into. bullion, at home. ‘The bank of England, notwithftanding
‘their great annual coinage, found to. their aftonifhment,’ that
there was every year the fame {carcity, of coin. as there -had been
ithe year before; and that notwithftanding the great quantity
of good and new coin which was every year iffued from the
bank, the ftate of the coin, inftead of growing better and better,
became every year worfe and worfe. Every year they found
themfelves. under the neceffity of coining nearly the fame quantity
of gold as they had coined the year before, and from the con-
tinual rife in the price of gold bullion, in confequence of, the
continual wearing and clipping of the coin, the expence of this
great annual coinage became every year greater and greater. The
bank of England, it is to be obferved, by fupplying its own
coffers with coin, is indireétly obliged to fupply the whole kingdom,
into which coin is continually flowing from thofe, coffers in a
great variety of ways. Whatever coin therefore was wanted
to fupport this exceffive circulation both of Scotch and Englifh paper
money, whatever vacuities this exceflive circulation occafioned in
the neceffary coin of the kingdom, the bank of England was
obliged to fupply them. The Scotch banks,-no doubt, paid all
of them very dearly for their own imprudence and inattention,
But the bank of England paid very dearly, not only for its own
imprudence, but for the much greater imprudence of almoft all
the Scotch banks.

Tue over trading of fome bold projectors in both parts of
the united kingdom, was the original caufe of this exceffive cir
culation of paper money.

Wuat

“SRR, WEALPH, OF NATIONS:

367

se pAbank can. with propriety advance to a merchant or be

r Of any kind, is not, cither the whole capital: with —“—~
rf y thades, or even any-confiderable part of that capitals
vot that part. of it only, which. he would otherwife be obliged

to keep by him unemployed, and in ready money for anfwering
oecafional. demands. If the paper money which the bank advances
ever “exceeds this value, it’ can’ never. exceed the value of the
4 n fiver, “which . would anecelfarily circulate in, the country
‘here Was fio “paper money; it can never exceed the quan-
ti me sd areas of the country can eafily abforb and
tay.

wend sit dikount to'a merchant ‘a ‘ped bill of eecbingh.
drawn ‘by‘a real ‘cfeditor: upon a real debtor, and which, as foon
agit becomes die, is really paid by that debtor; it only. advances.
to hit a part’ of the value which he would otherwife be obliged
‘go keep. by him ‘unemployed, ‘and in ready money for anfwer-
otial demands. ‘The payment of the bill, when ‘it
‘Pecorhes due, replaces to the bank, the value of what it had.
advaiiced,, together with the intereft. The coffers of the bank, fo.
fly’ as ite dealings ‘are confined to. fuch cuftomers,. refemble a
water pond, from which, though a ftream is continually running;
‘oat, yet another is continually running in, fully equal’ to’ that
which runs out; fo. that, without any further care’ or attention,.
the pond keeps always equally, or very near equally full. Little or
no expence can ever Re. neceffary for mpiniing, the: coffers of:
Such a-bank.. f

A MERCHANT; wittiouk ays Bey ‘may » ena liste
eccafion for-a fum of ready money, -even. when-he has no bills to
difcount. When a bank, befides difcounting his bills, advances.
him likewifeupon fuch occafions,, fiach.fums upon his cath account,.
and accepts of .a. piece-meal repayment’as the money comes ia.

Vo. I.. 344 from:

Ys |

Feo Watune BMD OSE Br
, ip the eaty

ficiently frorii -his' cafh. account, | "the pene ’
ing. With. fitch -cuftomters, ought to’ ta po ,
whether iit the coutfe of fome fhort Se

or cight months, forexample) the fitit’ re het met lai
it commonly. receives ftom therh,. it, or. is ‘nd, ily
that. of the, advances which, it sommenly makes, to they ie
within the courfe of fuch fhort Periods, the fum. of t er
payments ‘from. certain cuftomers is, upon moft ocafions, f diy
éqiual’td' that! Gf tlie 'advandes, it: may: fafely. continue: to: deal
with futh euftomers: “Though the ftream’ whith. isin. this: cafe
Continually runing our frofit its! coffers: may be very large; (that
whichis: eointhiadll y-rorining thito ‘then mult’ bd: at Indtt-equally
terges Yo etiat without arip-filithier cafe or attention ‘théle coffers
Ure liRdly to bé always equally'or very near equally full’; ahd fate
avert tetfitire ‘any ‘extradtdinary expetice to replenith them... (Tf,

“Ow the eonefary; ‘the Tait ‘of the repayments: from certain other

CUlesthiers’ Yale Conimionly: very ‘much “thdrt ‘of the advances: which
it’ ‘piakes ‘te’ eheii, ft etthnot ‘with any fafety continue to. ideal

‘With ‘Tach caltémers, “at feat if they continue: to: deal with: it

in ‘this ‘mafiner. ‘The’ ftream ‘which is in ‘this’ caf contismually

‘Panning bit Groth’ coliées "ty nepeMtarily much argér third that

whichis” onitittually rtifihing ‘iny fo that, unlefd’ they are: reple-
niflied ’by folic! ' great ‘add -continualeffort of — thofe
clits at Ree Sa erage sj

no! * ye iq aft

° pe ey: sip OF wisieehas waieaiednelte for
“long tinte VAY Batch: t07 i; gratia aid’ ‘eg epi

nts

“THE WEALTH OF NATIONS, 369

ments from all theif cuftomers, and did not care to deal with CHA P.
any perfon, whatever might be his fortune or credit, who did \—~
not’ make, what they called, frequent and regular operations

with them. By this attention, befides faving almoft entirely

the extraordinary expence of replenithing their coffers, they gained

two other very confiderable advantages.

First, by this attention they were enabled to make fome
tolerable judgement concerning the thriving or declining cit-
. cumftances of their debtors, without being obliged to look out
for any other evidence befides what their own books afforded
them; men being for the moft part cither regular or irregular
in their repayments, according as their circumftances are either
thriving or declining. A private nian who lends out his money
to perhaps half a dozen or a dozen of debtors, may, either by
himfelf or his agents, obferve and enquire both conftantly and
carefully into the conduct and ‘fituation of each of them. But
a banking company, which lends money to perhaps five hundred
different people, and of which the attention is continually occu=
pied by objects of a very different kind, can have no regular
information concerning the conduct and circumftances of the
greater part of its debtors beyond what its own ‘books afford
it, In requiring frequent and regular re-paymerits’ from all
their cuftomers,. the banking sien iia of Scotland “1c probably
this advantage in view.

‘SeconDiy, by ‘this attention ‘they fecured themfelves from
the poffibility of iffuing more paper money than what the cir-
culation of the country could eafily abforb and employ. When
they obferved that within moderate periods of time the re-pay-
ments of a particilar cuftomer were upon moft ‘octafions fully
coal to the:-advances ‘whieh they had made to ‘hint, they hig

‘Voi. I 3 B be

379

THE NATURE AND CAUSES OF

BOOK be affured that the paper money which they had advanced to him,
i———» had not at any time exceeded the quantity of gold and filver

which he would otherwife have been obliged to keep by him
for anfwering occafional demands ; and that confequently the paper
money which they had circulated by his means had not at any
time exceeded the quantity of gold and filver which would have
circulated in the country, had there been no paper money. The
frequency, regularity and amount of his re-payments would
fufficiently demonftrate that the amount of their advances had
at no time exceeded that part of his capital which he would
otherwife have been obliged to keep by him unemployed, and
in ready money for anfwering occafional demands; that is,
for the purpofe of keeping the reft of his capital in conftant
employment. It is this part of his capital only which, within
moderate periods of time, is continually returning to every dealer
in the fhape of money, whether paper or coin, and continually
going from him in the fame fhape. If the advances of the bank
had commonly exceeded this part of his capital, the ordinary
amount of his re-payments could not, within’ moderate periods
of time, have equalled the ordinary amount: of its advances:
The ftream which, by means of his dealings, was continually

- running into the coffers of the bank, could not have been equal:

to the ftream which, by means of the fame dealings, was con«
tinually running.out. The advances of the bank paper, by exceed

ing the quantity of gold and filver which, had. there: been’ no.

fuch advances, he would have been obliged to keep by him ‘for
an{wering occafional demands, might foon come te exceed the whole
quantity of gold and filver which (the commerce being fuppofed the
fame) would have circulated in the.covatry had there been no paper
money; and confequently, to.exceed.the quantity: which the -cirs
culation of the country could eafily abforb and employ ; atid the
excefs of this paper money would immediately have returned upon

the.

THE WEALTH OF NATIONS,

371

the bank in order to be exchanged for gold and filver. This fecond CH AP.
', advantage, though equally real, was not perhaps fo well unde ftood wa—_

by all the different banking companies of Scotland as the firft,

Wuen, partly by the: conveniency of difcounting bills, and
partly by that of cath accounts, the creditable traders of any
country can be difpenfed from the neceflity of keeping any part
of their ftock by them, unemployed and in ready money, for
anfwering occafional demands, they can reafonably expect no
further affiftance from banks and bankers, who, when they have
gone thus far, cannot, confiftently with their own intereft and
fafety, go farther. A bank cannot, confiftently with its own
intereft, advance to a trader the whole or even the greater part
of the circulating capital with which he trades; becaufe, though
that capital is continually returning to him in the fhape of money,
‘and going from him in the fame fhape, yet the whole of the re-
turns is too diftant from the whole of the out-goings, and the
fum of his repayments could not equal the fum of its advances
within fuch moderate periods of time as fuit the conveniency of
a bank. Still lefs could a bank afford to advance him any con-
fiderable part of his fixed capital; of the capital which the un-
dertaker of an iron forge, for example, employs in erecting his
forge and fmelting-houfe, his work-houfes and warehoufes, the
dwelling houfes of his workmen, &c.; of the capital which the
undertaker of a mine employs in finking his fhafts, in erecting
engines for drawing out the water, in making roads and waggon-
ways, éc.; of the capital which the perfon who undertakes toimprove
land employs in- clearing, draining, enclofing, manuring and
ploughing wafte and uncultivated fields, in building farm-houfes
with all their neceflary appendages of ftables, granaries, &c.
The returns.of the fixed capital are in almoft all cafes: much
flower than thofe of the circulating capital ; and fuch expences,

3B2 even

THE NATURE AND CAUSES OF
even when laid out with the greateft’ prudence and judgemient,

tema very feldom return to the undertaker till after # period of many

years, a period by far too diftant: to fuit the conveniency of a
bank. Traders ahd other undertakers may, no doubt, with
great propriety, carry on a very confiderable part of their projors
with borrowed money. In juftice to their creditors, however, the,

own capital. ought, in this cafe, to be fifficient to enfure, if I
may fay fo, the capital of thofe creditors; or to render it ex.
treamly improbable that thofe creditors. fhould incur any lofs, even
though the fuccefs of the projec fhould fall very. much fhort of
the expectation of the projectors. Even with, this precaution
too, the money which is borrowed, and which it is meant fhould
not be repaid till after a period of feveral years, ought not to
be borrowed of a bank, but: ought to be borrowed upon bond
or mortgage, of fuch private people as propofe to live upon the
intereft, of their money, without taking the trouble themfelves.
to employ the capital; and who are upon that account willing
to lend that capital to fuch people of good credit. as are likely to.
keep it for feveral years. A bank, indeed, which lends its money
without the expence of ftampt paper, or of attornies fees for
drawing bonds and mortgages, and which accepts of repayment
upon. the eafy terms of the banking companies of Scotland ;
would, no doubt, be a very convenient creditor to fuch traders
and undertakers. But fuch traders and undertakers would, htt
be moft inconvenient debtors to fuch a bank.

Ir is now more than five and twenty years fince the paper
money iffued by the different banking companies of Scotland
was fully equal, or rather was fomewhat more than fully equak
to what the circulation of the country could eafily: abforb and
employ. Thofe companies, therefore, had fo long ago: given.
all the afliftance to the traders and other undertakers of Scotland.
which

THE WEALTH OF NATIONS,

373

which it is poffible for banks and bankers, confiftently with CHAP,
their own: intereft, to give. ‘They had even done fomewhat w-pme

more, ‘They had over-traded a little, and had brought upon them-
_felves that lofs, or at leaft that diminution of :profit, which in
this particular bufinefs never fails to attend the fmalleft degree
of over-trading. Thofe traders and other undertakers, having got
fo mach ‘afiftgnce from: banks and bankers, withed to get ftill
more,” The banks, they feem to have thought, ‘could extend
their credits to whatever fum might be wanted, without incurring
any other expence befides that of afew reams of paper, They
complained of the contraéted views and daftardly fpixit of the
directors of thofe banks, which did not, they faid, extend . their
credits in proportion to the extenfion of the trade of the coun-
try; meaning, no doubt, by the extenfion of that trade, the
extenfion of theis own projecta beyond what they could carry
on, either with their own. capital, or with what they had credit
to: borrow of private people in the ufual way of bond or mort-
gage. The banks, they feem to liave thought, were ii honour
bound to fupply the deficiency, and to provide them with alk
the capital which they wanted to trade with. The banks, how-
ever, were of a different opinion, and upon theic’ refufing to
extend their credits; fome of thicfe traders.*had: recourle: to an
expedient which, for a time, ferved their’ purpofe, though at a
much greater expence, yet as effectually as the utmoft extenfion
of bank credits could have done. This expedient wae no other
than, the well-known fhift of dvawing and’ re-drawing:; the fhife
to which ‘unfortunate traders have fometimes recourfe when. they
are upon the brink of bankruptcy. ‘The pradtice of raifing
money in this manner hed been long known in England, and
during the courfe of the late war, when the high profits of
trade: afforded a great: ternptation to over-trading, is faid to have
been ‘carried om to a very great extent. Prom England: it was’

7 brought

374 THE NATURE .AND ‘CAUSES OF

EGOS brought into Scotland, where, in proportion to the very: limited

t-—-y—~ commerce, -and to the very moderate capital of the’ country, it
‘was foon. carried on to a much .greater extent than it ever had

(been.in.Engiand. ;

‘Tue practice of drawing and re-drawing is fo well known
to all men of bufinefs, that it may perhaps be thought unneceflary
to give any account of it. But as this book may come into
the hands of many people, who are not men of bufine(s, and
as the effects of this practice upon the banking trade are not
perhaps generally underftood even by men of bufinefs them-
{elves, I fhall endeavour to explain it as diftinctly as I can.

‘Tue cuftoms of merchants, which were eftablifhed when the
barbarous laws of Europe did not enforce the performance of
their contracts, and which during the courfe of the two laft centuries
have been adopted into the laws of all European nations, have
given fuch extraordinary privileges to bills of exchange, that
money is. more readily advanced upon them, than upon. any other
fpecies of obligation ;. efpecially when they are made payable within
fo fhort a period as two or three months after their date. If when
the bill: becomes due, the acceptor does not pay it as foon as it
is prefented, he becomes from that moment a bankrupt. The
bill is protefted, and returns upon the drawer, who, if he does not
immediately pay it, becomes likewife a bankrupt. If before it
came to the perfon who prefents it to the acceptor for pay-
ment, it had paffed through the hands of feveral other perfons,
who had fucceflively advanced to one another the contents of it
either in money or goods, and who, to exprefs that each of them
had in his turn received thofe contents, had all of them in their
order endorfed; that is, written their names upon the back of
the bill ; each endorfer becomes, in his turn liable to the owner
of

Le | a i eT iad

THE WEALTH OF NATIONS.

of the bill for thofe contents, and if he fails to pay he becomes
too from that moment a bankrupt. Though the drawer, ac-
ceptor, and endorfers of the bill fhould, ‘all of them, be perfons
of doubtful credit; yet ftill the fhortnefs of the date gives fome
fecurity to the owner of the bill. Though all of them may be
very likely to become bankrupts ; it is a chance if they all become
fo in fo fhort a time. The houfe is crazy, fays a weary traveller
to himfelf, and will not ftand very long; but it is a chance if
it falls to-night, and I will venture, therefore, to are in it
to-night.

Tue trader A in Edinburgh, we fhall fuppofe, draws_a bill upon
B in London, payable two months after date, In reality.B in
London owes nothing to A in Edinburgh ; but he agrees to accept
of A’s bill, upon condition that before the term of payment he
fhall redraw upon A in Edinburgh, for the fame fum, together
with the intereft and a commiffion, another bill, payable likewife
two months after date. B accordingly, before the expiration of
the’ firit two months, re-draws this bill upon A in Edinburgh ;
who again, before the expiration of the fecond two moths;
draws a fecond bill upon B in London, payable likewife two:
months after date; and before the expiration of. the third two.
months,. B in London re-draws upon A in Edinburgh an-
other bill, payable alfo two months. after date. This practice
has. fometimes gone on, -not only for feveral months, but for
feveral years. together,. the bill always: returning- upon A in
Edinburgh, with the accumulated intereft and commiffion of
all the former bills. The intereft was five per cent. in the
year, and the commiffion was never lefs than one half per cent..
on each draught. This commiffion-being repeated more than

fix times in the year, whatever money A might raife by, this :exe -
pedient mutt: neceffarily have.coft*him fomething more.than eight -
” 4 Pere

375
CHAP.

376

BQO:
Y.

THE NATURES) AND; CAWBES -OF

K per cent. in the years and Sometimes aignesh deal more 5.whep

Udievemed ag the: price :of': the) commifiiem Happened: to. 26, er when

he was obliged to ipay. compound: anserett upon:.the interet and
commiffion of former bills. This hg aie was veh) Ys
money na circulation. |

In @ country where the ondinuirg elias af. feo in the
greater part of mercantile projects are fiuppoled, to. run. between
fix and ten per cent.; it muft. have ‘been.a very fortunate, fpe~
culation of which the returns could not only repay the enor-
mous expence at which the money was thus borrowed for car-
rying it on; but afford, befides, a good furplus. profit ‘to the pito-
jector.. Many vaft and extentive projects, however, were, under
taken, and: for feveral years cartied an without amy other fund to
fupport them befides what was, raifed at this enormous expance.
The projeftors, no. doubt, had in their golden dpsams: the mot
diftingt vifion of this great profit... Upon their awaking,, however,
either at ‘the end of their projects, or when. they, wers,mo longer
able: to carry them..on, they very feldom, I believe, had ft ip Ger
chine plete bY) 4g fF hae bids

The bill vihich A ii mening cei nee Bi in Lensdoiyhe

regularly dicounted two months before they were due with fame:

bank’ or banker in- Edinburgh; ‘and’ ‘the bills which. B in London
re-drew upon ‘Ain Edinburgh, ‘he as'regularly difcounted either
with the bank of England, or with fome other Bankers ‘in Lon-

‘don. Whatever was advaneed upon fuch circulating bills was, in

Edinburgh, ‘advaneed in the paper of the Scotch ‘banks, and in
London, when they were difcounted at the bank of England, in
the paper of that bank, ‘Though the bills upon which this paper
had been advanced, ‘were all of them repaid in their turn as foon
as they became due; yet the value which had been really ad-
vanced

Bae we eo

THE WEALTH OF NATIONS.

377

vanced upon tii: it bill, was never really returned to the banks © HA P,
which advanced ix; becaufe before each bill became due, another e\—w

bill was always drawn to fomewhat a greater.amount than the bill
which was foon.to be paid; and the difcounting of this other bill
was effentially neceflary towards the payment of that which was
foon to be due, This payment, therefore, was altogether fictiti-
‘ous. The ftream, which by means of thofe circulating bills of

"exchange, |had once ‘been made to.run out. from the.coffers of the

banks, was never replaced by any.ftream which really run into
them.

Tue ‘paper which was iffued »upon -thofe circulating bills of
exchange, amounted, upon many oceafions, :to..the whole -fund
‘déftined “for carrying on :fome ivaft/and_ extenfive project of agri-
‘culture, commerce, or manufactures; and not merely .to that
‘part of it which, had there/ been ‘no:paper: money, the projector
iwould:have been: obliged: to: keep:by!him, »unemployed,and, in ready
monty, ifor/anfwering' occafional demands. «The..greater ;part - of
this*paper was, confequently, aver .and jabove:the value of »the
goldeand ‘filver which «would have circulatediin the country, :had
‘there “been ‘ no’ paper maney. “It sas. over amdtabove, therefore,
‘What the: ciyoulation of theccountry.cowld eafily abforb yaad .em-
“ploy, jand, ‘upon ‘thataccount, ‘immediately sretitned upon the
Banks: in order’ tobe ‘exchanged :for.gold and filver, .which they
“were :to’ firid as ‘they ‘could. It ».was 2a -capital »which :thafe
‘projeEtors ‘had-very artfully contrived to idraw from:thofe banks,
‘not’only without! their knowledge .or deliberate -oonfent, ! but ‘for
ome time, perhaps, without theihaving the moftidiftant. fufpicion
‘hat they ‘had ‘really: advanced it.

_ Wuen two people, whio.are continitally drawing arid-re-drawing
upon one another, difcount their bills always with thd fame banker,
‘Vou. I. 3.C he

THE NATURE AND! CAUSES {OFT
he muft immediately difeover what theyiarecabout;:and fee clearly,

—— that they are trading, not with any capital ‘of ithéit, own; but with

the capital which he advances'to’' them: But: this: difcovety ‘is!not ial«
together fo eafy when’ they difcount their bills fometimes/ withione
banker, and fometimes with another, and when the fame itwo:pers
fons do not conftantly draw and re-draw upon one another,;-but
occafionally run the round of a great cireleiof projectors; who find
it for their intereft'to affift one another inthis method of>taifing
money, and to render it, upon that) account;,: as difficult;|aa; pof-
fible to diftinguifh between a real anda fictitious bill of exchange;
between a bill drawn by a real creditor upon a real debtor, and..a
bill for which there was properly no. real,.creditor; but ;the, hank
which difcounted it; nor any real debtor but the projector who
made ufe of the money. » When a banker had even, made, ¢ his
difcovery, he might fometimes make it too late, and, might ‘End
that he had already difcounted the bills of thofe projectors, to.,fo
great an extent, that by, refufing to difcount.any more, he would
neceflarily make them all bankrupts, and thus, by ruining them.
might. perhaps ruin, himéelf. .. For his. own, interelt, anh -fafety,.
therefore, /he might find it neceflary, in this very: perilous fi ituation,
to goon, for fome time, endeavouring, , however, to withdraw
gradually, and upon that account making every day. greater, ; and.
greater difficulties about difcounting, in order to force; thofe Projec-
tors by. degrees to have. recourfe, either to other bankers, , or to.
other methods of, raifing money; fo as. that he himéelf might, as

foon as poffible, get out of the circle. The difficulties, accordingly, |
which the bank of England, which the, principal bankers. in
London, and which even the, more prudent. Scotch banks pega an,
after a certain time, and when all of them. had, already gone too
far, to make about difcounting,. not. only alarmed, but, enraged.
in the higheft degree thofe projectors. Their own diftrefe, of
which this prudent and neceffary referve of the banks, was, fho.

oubt,.

THE? WEAL TH 0 F ANAT YON S, +. . a9

i doubt; the immediate:occafion, they, called the diftre(s of the:coun- CHAP. .
thyyy and thisodiftzefScof ithe) countrys they faid,.was. altogether, Vay
is owingtito the ignorarice; ‘pufillanimity,,,and,.bad conduct of the
banks;i which didnot! give aifufficiently Jiberal. aid tothe fpirited
undertakings:of: thofe! who exerted themfelves in order to beautify,
it improve, cand:enrich the country. It, was the duty. of the banks,
d they feemed to think, to»lend for as long ;a. time, and to as great
| anilextent as:they might: with to borrow... The banks, however,
by refufing im this manner to give more icredit to thofe to whom
they’ had'2lready given a great deal too much, took the only method
by Which it was ‘now poffible to fave either their own credit, or the
publick' sini of the country. La |
otlw tosozjo1q oslt 7
si ie ae of thid clatiogr Hd distress a°itiew bank was’ efta»
‘pine in Scotland for the exprefs ‘purpofe of relieving the diftrefs
Of thé “country. "The defign was ‘generous; ‘but the execution
‘Was ‘imipradent, ‘and the nature atid’ caufes of ‘the diftrefs which it
theditto ‘relieve; were not, perhaps, ‘well underftood: This‘ bank
was” more liberal than any other had’ ever ‘been, ‘ both’ in grantmg
‘cath’ accounts, ‘and in difcounting bills of exchange. With regard
‘to the ‘latter, it feems to have made fcarce'any ‘diftinétion’ between
“real ‘and “ciréulating bills, ‘but’ to have ‘difcountéd ‘all equally.’ It
was the avowed 'principle‘of this ‘bank to’ advance; upon’ any rea-
“fonable Redutity, the whole capital’ which was 'to be Minptoyed's in

t UJ

EO 2 FB OF BO

‘fuch as 3 the improvements of land. To promote fuch improvements
v “was even faid to be ‘the chief ‘of the publick fpirited’ purpofes for

i “which it Was inftituted.” By ‘its liberality in granting cath accounts,
Re ‘and in difcounting bills of exchange, it, no doubt, iffued great
a " quantities’ of its bank-notes, But thofe bank-notes being, the
i greater part of them, over and above what the circulation of the
a country could eafily abforb and: employ, returned upon it, in
. : 3C2 order

596

oor 4

‘ THE NATURE AND CAWSES''OF

ofdér tobe exchanged for gold and’ filver;''ae'\fath ‘as'they were
ified.’ ‘It’ Coffers Were never welf’filed. ‘The capitdl which had
been fabfetibed to’ this bank at two different fubltriptions, amounted
to one’ huhdred atid fixty thoufand’ pounds; of which eighty ‘per
cent. only was paid up. This fum ‘ought’ to have ‘been paid in
at feveral ‘different inftallments. -A great part of the ‘proprietors,
When they ‘paid in their fit(t inftallment, opened! a'cafly'aceount
with the bank; and: the direttors, thinking ‘themfelves obliged to
treat their Own proprietors with the fame ‘liberality ‘wich Which they
treated ‘all Other ntten, allowed many of them ‘to’ ‘borrow’ tipon’ this
cath aceount’ what they paid in ‘upon’all ‘their fablequent inftall-
ments. Such payments, therefore, only-put into one coffer, ‘what had
the moment before been taken out of another. But had the coffers of
this bank ‘been ‘filled* ever’ fo" well, its exceffive ‘circulation’ mult
have emptied ‘them fafter- than ‘they could have - been -replenithed
by any other expedient but the ruinoue°one of ‘drawing:apon; bone
don, and when ‘the bill became due, paying it,’ together with
intereft and commiffion, ' by:another: draught upon.the fame: place.

Its ‘coffers ‘having ‘been -filled: fo very: ill, it is: faid‘to ave been
driven ‘to this refourece within'a very few: months after /it began to
do ‘bufinefs:’: The eftatesof she proprietors -of this bank .were
‘worth ‘feveral: millions, and by their-:fubfcsiption.to: the original
-bond ‘or contraét of ‘the bank, ‘were really pledged for anfwering
ail its ¢ngagements, »By means. of .the.great credit which fo:great
a pledge meceflarily gave it, it was, notwithftanding its too liberal
-condust,.-enabled to: carry on bufinefs for more than two years.
When -it” was obliged to -ftop, “it ‘had, in the circulation ‘about
‘two’ ‘hundred :theufand: pounds ‘in-bank-notes..\ In order to'fup-
\port the circulation of: thofe/notes, which were continually-returh-

“ing Miwon! tit as faft.as'cthey were -iffued, it ‘had’ been: conftantly

‘in ‘the prattive sof odrawing bills of exchange upon .Lendon,,..of

‘which «the number! and) value were continually increafing,’ ,and,

4 when

awe oe.rT Ff’ a-_

d
of
%
a
‘
th
c.
n
to:
re
al
ag
‘at
ral

THE: WEALTH. OF NATIONS,

38%

when it: ftopt,,) amounted to upwards of fix hundred. thoufand GH, P,
pounds). This. bank, therefore, had,, in, little more than the —v—~

courfe,.of two years, advaneed to different people upwards of
eight, hundred. thoufand pounds. at five per cent. . Upon the two
hundred thoufand pounds which it circulated in bank-notes, this
five per cent. might, perhaps, be confidered as clear gain, without
any other, deduétion befides the, expence of management. But
upen.ypwards of fix hundred thoufand pounds, for which it was
soptinually, drawing bills of exchange upon London, it was paying,
in| the. way. of intereft and commiffion, upwards of eight per
cent. and was confequently lofing more than three per cent. upon
more shen hesenfbosthe of all its dealings.

lo ¢

fii Tua ‘nabaabians of this hank feem, to have produced effects quite
oppofite to thofe which were intended by the particular perfons
who planned and directed it. They feem-to have intended to fup-
sport the fpirited undertakings, foras fuch they confidered them,
swhich:were at that,time. carrying qn in different parts of the coun-
tsys andiat.the fame time, by drawing the whole banking bufine(s
to:themfelves, to fupplant all the other. Scotch banks; particularly
thofe eftablifhed at Edinburgh, whofe backwardnefs in difcounting
\bills,of exchange. had given fome offence. This bank, no doubt,
save, fome temporary relief to. thofe projectors, and enabled them:
ito. carry|.on, their projets for about two years longer than they
could otherwife have done. But it thereby only enabled them to

get fo..mych, deeper, into debt, fo that when ryin came, it fell | fo

jmpuch the: heavier both upon them and upon their creditors. The
operations, .of this bank, therefore, inftead. of relieving, in reality
aggravated, in. the long-run the diftrefs which thofe. projectors hag
-byqught both upon themfelves and upon their country. Jt would have
been, much better for themifelves, their creditors and. their country,
had the greater part of them, been obliged to ftop. two years, fooner’

than

EP nce ATED A A ETE

THe ‘NATURE’ AND CAUsES Gr
K than they agtually did. The temporary relief,’ however, “whi

C= this bank afforded to thofe projectors, proved 2 a real and permanéht

télief to the other Scotch banks. ‘All’ the dealers in circulating Wifts
of exchange, which thofe other banks had become fo backward if
difcounting, had recourfe to this new bank, where they were’ ie

ceived with open arms. Thofe other banks, therefore, were
enabled to get very eafily out of that fatal circle, from which they
could not otherwife have difengaged themfelves without ineurring

a confiderable lofs, and perhaps too even fome degree of" tal
credit.

In the long-run, therefore, the operations of this bank increafed
the real diftrefs of the country which it meant to relieve; | and
effectually relieved from a very great diftrefs thofe fivals ‘whom i it
meant to fapplant, fit, solicr
Ar the firft fetting out of this bank; it was the opinion of fome
people, that: how faft ‘foever its coffers might be emptied; it: might
eafily replenifh them by raifing money upon the fécufities of: thofe
to whom it ‘had advanced its paper. Experience, I believe, ,foon
‘convinced: them that’ this method of raifing money was’ by much
too flow to arifwer'their purpofe; and that coffers which: originally
weré fo ill filled, and which emptied themfelves:fo very faft; could
be replenithed by no other expedient but the ruinous one:of drawing
bills upon London, and when they became due, paying: them by
other draughts upon the fame place with accumulated’ intereft:and
commiffion,,;,|But though they had been able by this) :methed=to
raife money as; faft asthey wanted it; yet inftead of -making:a
profit, they muft have fuffered a lofs by every fuch operation}, fo
thatiin, the long-run they muft have ruined themfelves. as a mer-
cantile company,, though, ..perhaps, not (fo. foon: as by the! more
sanpenine prattice.of drawing and, re-drawing. They could ftill
have

e
it
fe
n
h
ly
id
iS
ny
id
0
a
fo

<s {ES oC
ae

BHE, WEALTH, OF NATIONS,

have made nothing by the intereft, of the paper, which, being over
and. above, whet the circulation, ‘of t the country could. abforh and
employs, f returned upon,them, in order to, be exchanged. for. uh
and. filver,, as. fat as. they iffued it; and for, the payment. of 5 w
they were . ‘themfelves continually obliged ia borrow money, po
the contrary, the. whole expence of this. borrowing, of employing
agents to look. out for people who had money to lend, of nego
ciating \ with thofe people, and of drawing the proper bond.or aflign-
1ent, ‘mutt have fallen upon them, and have been fo much clear
lofs upon the balance of their accounts. The project of replenifh-
ing their coffers in this manner may be compared to that of a man
who. had. a. water-pond. from. which: a ftream. was continually
runnin out, and into which. no ftream was continually running,
but who 'propoted | to keep. it always equally full by. employing a

num

miles diftance in. order. to bring water to replenifh it..

sBur ‘though this operation: had ‘proved, ‘not: only’ practicable, .

‘Buteprofitable; to the bank: asia mercantile: company's yet. the
‘eountty could>have' derived’ no benefit from it; but, onthe: con-
‘trary: muft Have fuffered a very confiderable lofs by it. This-ope-
‘ration’ could not augment in the fmalleft degree the: quantity of
mhoney ito: be! Jent.* It could only have. ereéted’ this. bank into
taudorttiof ; general loan. office for: the: whole country. © Thofe

ywho: wanted ‘to borrow, muft have applied ‘to this: bank, ‘inftead of :

vapplying :to the private perfons who had lent it their. money, ‘But
tabdnk) whichislends money, perhaps, to five hundred ‘diffesent
opeople;, the greater part of whom ‘its dire&tors. can! know very: little
sabout; ‘is 'noti likely ‘to be ‘more’ judicious in’ the choice of ‘its
odebtors;.\than a private perfon. who lends out his ‘money. among
afew “people ‘whom he knows, and in’ whofe fober ‘and’ 'fragal
covdu® he thinks*he has good* reafon' to’ confide: ‘| ‘The debtors
of fuch’abank, ag: that! whofe’conduct: I have’ been’ giving fonte

account:

mber of people to go continually with buckets to a well at fome:

383
SHAE
—ymnd

THE NATURE AND CAUSES ‘OF

B 0 k account of, were likely, the greater ‘part of them) ‘to: ‘Be chittie-
Ss, rical projectors, the drawers dtid ‘re-diawers ‘of’ Ciréubitinig bills

of exchange,, who. would employ the money.in extravapdnt under-
takings, which, with all the affiftatice that could “be ‘wer them,
they would probably r never be able to complete, ‘and “Which, if
they fhould be compleatéd, would ‘Hever repay, the ‘expénce “Which
they had really coft, would never afford ‘a fund capable‘of ‘iii.
taining a ‘quantity of labour equal ‘to ‘that which ‘Had ‘Béeh éin-
ployed about them. The, fober ‘anid ‘Frugal debtors ' Of private
‘perfons, on the contrary, would ‘be ‘more likely” to ‘erfiptdy’ te
‘money bofrowéd ‘in fober undertakings ‘which ‘were ‘proportioned
to their capitals, and which, though the ‘might | Kave ‘lefs’ &f
‘the ‘grand and the | ‘marvelldus, ‘would’ have mote 6f fe fetid
‘and the profitable, which ‘would ‘Tepay With “a latge profit “Wwhat-
‘ever had been laid out upon’ ‘thei, ‘and which Wotfd thus dfford
a fund capable of‘ niaintaining’ a’ uch ‘greater quantity OF “labour
than ‘that. which had been employed about them, ‘The fuccefs
.of this operation, therefore, without encreafing i in’ the tmaltett
degree the capital of the country, would only have “tratisfetred a
great, part ‘of it, from prudent and profitable, to si ea and
unprofitable undertakings.

‘Tuat the induftry’ of Scotlatid tarigitiftied for ‘want°of ‘Hiéney
to employ ’'it, ‘Was ‘the opihion of the fanious Mr. Law, | By éfta-
“blithinig ‘a ‘Baik ‘of ‘a’ pasticular "Kind, ‘Which, “he ‘feetiis’ to ‘have
‘fintagined, ‘night’ iffae: paper to’ the 'attiotint of the Whiole’vatue
‘of all ‘the Tands in ‘the country, ‘he ‘propofed to rémedy this want of
“money. "The! parliathent’ of’ Scotland, ‘when: he firth propofed “his
‘project, did fot. thirik<pyoper“tovadepe it, “It was afterwards
‘adopted, ‘with fome’ variations, ‘by the duke’ of Orteahs, “at ‘that
‘time regent of Frante. «The idea of the poffibility of ‘multiplying
‘ paper nidney t6 uliont any extent, was the real-fourldatibrt of what

is sealed ‘the Miflifiippi fcheme, ‘the’ ‘mom’ sabia th aise

:
‘
‘
‘g
a
3
}
i
t
i
t

HE WEALTH OF NATIONS,

of banking and ftock-jobbing that, perhaps, the world ever faw. CHA

385
AP.

The different operations of this {cheme are explained fo fully, fo ———

clearly, and with fo much order and diftinétnef, by Mr. Du
Verney, in his. Examination of the Political Refleétions upon
‘Commerce and Finances of Mr. Du Tot, that I hall not give
‘ny account of them. The principles upon which it was founded
are explained by Mr. Law himfelf, in a difcourfe concerning money
and trade, which he publifhed in Scotland when he firft propofed
his project. The fplendid, but vifionary, ideas which are fet forth
‘in that and fome other works upon the fame principles, ftill con-
tinue to make an impreffion upon many people, and have, perhaps,
in part, contributed to that excefs of banking, which has of late
, been complained of both in Scotland and in other’ places.

(Pug) bank of England is the greateft bank of circulation in
Ewarope.,, It was incorporated, in purfuance of an aét of pailia-
‘ment, bya charter under the great feal, dated the 27th July, 1694.

| It at,that time advanced to government the fum of one million two

jfhyndred thoufand.pounds, for an annuity of one hundred thou-
» fand.pounds. or for 96,0001, a year intereft, at the rate of eight

| percent.,.and 4000 1, a year for the expence of management. ‘The

credit of the new government, eftablifhed by the revolution, we

may believe, muft ‘have been very low, when it was ‘obliged to
\ Borrow at' fo high an intereft.

“I 1697 the bank was allowed to enlarge ‘its capital ftock eh an

engraftment of 1,001, 711, 108. Its whole capital ftock, there-

_ fore, amounted at this time to 2,201,171 1. 108... This engraft-
ment 18 faid'to have been for the fupport of publick credit... In: 1696
tallies: ‘had been at forty, and fifty, and fixty' percent. difevunt,
and bank notes at twenty per cent. *. During the greatrecoinage jof
the filver, which was going on at this time, the bank-had thought
proper to difcontinue the payment of its-notes, which neceflarily
occafioned their difcredit. POR VIR
* James Poftlethwaite's Hiltory of the Publick Revenue, p2ge 301.

Vou. I. 3D In

ee SS SN

a ne ARTO el, RAN RRR So

meee

386

BGas
a.

THE) NATURE AWD.) CAUSES HOF

de! purefunoge of the! th: Anne}, 6. Wii. the basil calvavicad sed.
paid into the exchequer, the dum. .of 400,e00/1. 3\imeking: lin
all the: fum of :1,600,0001, which sit had advanced upon:cite
original annuity of 96,0001. intereft and 4000 li! for expariee iof
management. dn 1708, ‘therefore, the credit: of governnient was.as
good: as ‘that of ‘private perfons, fince it could ‘borrow: at fix per
cent. intereft, the common legal and market rate of thofe times. In
purfuance of the fame act, the bank ‘cancelled’ exchequer bills to.
the amount of '1,775,0271, 178. 10 $d. at fix per cent: intereft,
and) was at the’ faine ‘time ‘allowed ‘to take in‘ fub{cfiptions for
doubling its capital, In 1708, therefore, the capital of the -bank
‘amounted’ to 4,402,3431.; and it ‘had advanced to Soren
the fum of 3,375,0271. 178. to td.

By a call of fifteen per cent. in 1709, there was paid in and
made ftock 656,204 1.’ 1s." 9d.3\ and by another of ‘ten ‘per ‘cent.
in 1710, 501,448]. 128. 11d. In confequence of ‘thofe’ two:
calls, therefore, the ipseir -eapital amounted to 515396995. 1. 1¢he. Bd.

In purfuance of the 8th George I. c. xxi. the bane sine
of the South Sea Company,’ {tock to the amount of 45066,600'1. i
and int7a2, in>.confequence of the fubferiptions which! it ‘hai:
taken-in for enabling it to make this purchafe, its capital {tock was:
increafed: by 3,400,cc00l, At this time, therefore, thé bank had’
advanced:to. ‘the publick 9,375,027 1. 178, 103d. 5) and ‘its capital

ftock amounted only to'8,959,9951. 14.9. 8d. It 'was upon this

occafion. vhatithe fum which ‘the bank had advanced 'to the publick,,
and for which it received intereft, began firft to exceed:its eapital ftock;

or'the fam for which ‘it’ paid'a ‘dividend:to: the: Le ea of bank:
ftock 5: or,inother' words, that the bank began to/have an tac!

vided ¢apital, ‘overand ‘above its divided one. It has bona to:
have'an “urid‘vided ‘capital of: the fame kind ever fince. In 1746
the bank had, upon different occafions, advanced to the pub-

_SFRPEZ

FTHE WEALTH OF NATIONS,

387

Kok: £2;686;800/1.: and its divided capital had-been raifed by different © ape
callgend fublcriptions to 10,780,0001. ‘The ftate of thofe two way

fams hav continued to be the fame ever fince. In purfaance of the
qth of George IH. ¢.:25. the bank agreed to pay to government for
the: renewal of its charter, 110,0001. without intereft or repayment.
This:fom, therefore, did not increafe cither of thofe two other fums,

Fue dividend of the bank has varied according to the variations
in the sate of the intereft which it has, at different times, received
fo, tle money it, had advanced to the publick, as well as according
to, other, circumftances, This rate of intereft has gradually
been reduced. from eight to three per cent, For fome years
paft the bank dividend has been at five and a half per cems.

Tue ftability of the bank of England is equal to that of the
Britith government. All that it has advanced to the publick muft
be loft before its, creditors can fuftain. any lofs. No other
banking company in England can be eftablifhed by act of parlia~
ment, or can confilt of more than fix members. It aéts, not only
asanjordinaty bank, but as a great engine of ftate. It receives‘dnd
pays'the greater part of the annuitics which are due to the creditors
of the publick, it circulates exchequer bills, and it advances to
government the annual amount of the land and malt taxes, which
are frequently not paid’ up till fomie years thereafter. In’ thotedif.
ferent operations, its duty to the publick may, fometimes. have
obliged it, without any fault of its directors, to overftock: the cirs
culation with paper money. It likewife difcounts merchants bills,
and has, upon feveral different occafions, {upported theicredit of the
principal ‘houfes,, not only, of England, but, of Hamburgh and
Holland. Upon one occafion it is faid to have advanced for this puré
pofe, in one week, about 1,600,0061. ; a great part.of it in- bullion.
I do not, however, pretend to warrant either the,igreatnefs.of the
firm, or the thortnefs of the time. Upon ottier, occafions, this great

‘company has been reduced to the neceffity of paying in fixpences.

3D2 Ir

388

THD NATURE AND! ‘CAUSESH OF

BOOK holtadW/inot ty aupimenviig theodapitalof the lcdumeyyabile by
ea rendering! 'a greater’ pare of that) capital’ active said produaive

than’ would ‘otherwife ‘be 46,’ /that\ the! moh ‘judicious operations
of banking-can inereafe’ the indaftry® of the cotintry.°”"That part
of his capital which a dealer is obliged to ‘keep by “Hin “ttiem-
ployed, and in ready money for anfwering ‘occafidnal derharids
is fo much dead ftock, which, fo long as it remains in this fitu-
ation, pre: luces nothing either to him or to his country. The
judicious operations: of banking, ‘enable him to convert ‘this dead
{tock into ative and produétive ftock ; ‘into’ materials ‘to work
upon, into’ tools to work with, and into provifions and’ fub-
fiftence to work for; into ftock which ‘produces’ fomething both
to him and-to his country. “The gold and’ filver ‘money ‘which
circulates in any country, and by means of which, ‘the produce
of its land and Jabour is annually circulated and diftributéd” to
the proper confumers, is, im the fame manner as the teady money
of the dealer, all dead ftock. It is a very valuable’ part of ‘the
capital of thé’ country, Which produces nothing’ to the country.
The judicious operations of banking, by fubftituting paper ih’ the
room of 'a great'part of this ‘gold dnd filver, enables’ the ¢ountry
to convert a’great patt’of ‘this dead ftock into ative and ‘produc-
tive ftock ; into 'ftock which produces fomething tothe’ ‘country.
The gold’ ‘and’ ilver ‘money ‘which circulates ‘in’ any “country
may ‘ver'y ‘properly ‘be compared to a highway,’ which, While it
circulates ‘and’ ‘carries to market’ all the grafs and corn “of the
country, produces itfelf not a fingle pile of either, The judi-
cigus, operations. of Ney: by providing, if I may be allowed
fo violent 3, metaphor, a rt of waggon-way through the air;
enable. the co ntry to ‘convert, as it were, a great part of its
highways into good ‘pattures and corn fields, and thereby to in-
creafe very confiderably the annual produce of its land and. labour,
The commerce and induftry of the country, however, it muft be
acknowledged, though they may be fomewhat augmented, cannot
be

TOHEWEALAUA GB UNATIOMS 389

by ba altagothensty fecare) when, they iare,hus,::asit wermfifpented HA
Hie vpen. ithe, Desdalian; wings .of, paper money, as, when..they: travel ema!
oris : shout, upon the folid ground of gold and, filver, ...Over,and, aboye
bart the accidents to..which they, ar¢,expofed from.the, unfkilfulnels of
bitie the.conduhors of this paper.moncey, they. are liable to feveral, others,
ds from, which, no, Dandi: or {kill of thofe conductors, can guard
Pea them. ris
The

head AN “unfuccelsful , war, for example, in which the enemy, got
i ie polfeffic ion .of. the. capital, and, -confequently of that treafure which
7a fupported the credit of the paper money, would occafion a much
hath greater confufion, i ina country where the whole circulation. was
nn | carried on. by, Papers than i in one where the greater part of it was
tice carried on, by gold. and filyer. 3) Bhs, pfual, inftrument of commerce
to having lott, its value, no exchanges could be..made but either by
yney barter. Of, pon. credit. All taxes, having been ufually, paid in paper
the money, the, prince, would not have wherewithal. either. to . pay; , his
try. troops,,.or, to furnifh his magazines ; and the {tate of, the country
“the would be auch more irretrievable than, if, the greater, part, of ‘its
ntry ‘sirculation, shad confifted in: gold and filver.. A prince, anxious to
duc: maintain his dominions at. all times in the ftate in which he can
itry. moft,eafily defend them, ought, upon’ this account, to guard, not
ntry only. againit that exceffive multiplication of paper, money,..which
le it suins ithe very. banks which iffue it; but even againft that, multi,
the _ plication of it, which enables them to fill the greater. part of. the
udi- cigeylasion of the country with it. vo
‘ag ect ‘circulation of every country may be confidered as divided
ry a into two different branches ; the circulation of the dealers with’ one
a. another, and the circulation between the dealers and the confumers.
‘ee Thoygh the fame pieces of money, whether paper, or metal,. may

t be be employed fometimes in the one circulation and fometimes in the
other, yet as both are conftantly going on at the fame time, each
be : requires

39°

THE NATURE AND CAUSES OF

BOS K requires a certain: ftock. of money offone Kitid or another, to: carry
Caw it on... The value- of the goods: ctulated between ithe: different

dealers, never. can exceed: the: value of thofe: circulated: Between) the
dealer's- and the: .confumers;, whatever. is bought by © the: dealers):
being ultimately deftined to be fold to the confumers..\Fhe-cirews
lation between the dealers; as it is carried on by wholefale, requires
generally a pretty large fum for every particular, tranfaction, . Tikat
between the dealers and the confumers, onthe contrary, as.it is
genetally carried on by retail, frequently requires, but |very,,.fmall.
ores, a fhilling, or even a halfpenny, being often fafficient.,,.But
fall fams circulate much fafter than large ones. A Shilling, changes
mafters more’ frequently than a guinea, and 4 halfpenny more
frequently than a fhilling. - Though the annual. purehafés, off all:
the confiimers, therefore, are at leaft equal in-value to. thofe ofall:
the deafers, they can generally be tranfacted, with, a much. Smaller.
quantity of money ; the fame pieces, by a more rapid cireulition,:
ferving as the inftrument of many more purchafes of the one kind
than of the other. ow yl

Parer money may ‘be fo regulated, as either to ida ictelf
very much’ to’ the circulation between the different’ dealers, or to
extend itfelf likewife to a great part of that between the dealers
and the confumers. Where no bank notes are circulated under ten
pounds value, asin London, paper money confines itfelf very much
to the circulation. between tre dealers; When a ten pound bank
note comes into the hands of a confumer, he is generally obliged to
change. it at the firft fhop where he has occafion to purchafe five
fhillings worth of goods, fo that it often returns imito’ the Hatids of
a dealer, before the confumer has fpent the fortieth part of the
money.:. Where: bank notes are iffued for fo fraall fums as twenty
fhillings, asin Scotland, paper money exterids itfelf toa confiderable
part of the circulation between dealers and confamers, Before the
aét of parliament, which put a flop to the circulation of ten and

4 five

Gt Rereer re

THE TWRALTH AOR NATION'S.

fverthilling: dates, it filled ‘a fill greater part ‘of that’ eigcwlation |
Ja othe’ icurrencies of North America, paper ‘was commonly iffied
far!{o-fmall (a fum vas) a fhilling,’ and filled’ almoft’ the ‘whole of
that ‘entulation;' In: fome: paper ‘currencies of Yorkthite, it was
rorcealnsen fas fall @ fam as a fixpence.

Warne the e iffuing of ‘bank notes for fuch very {mall fums is
allowed and ‘commonly ‘practifed, many mean people are both
enabled! and encouraged to-become bankers. A perfon whofe pro-
miffory niote for five potinds, or even for twenty fhillings, would
be rejected ‘by every body, will get it to be received without feruple-
when itis iffied for fo {mall a fim as a fixpence. But the frequent
bankruptcies to which fuch beggarly’ bankers muft be liable, may
occafion'a‘very confiderable’‘incdnveriericy, ‘and fometimes even @

very® ‘great-calamity ' to many ‘poor ' people who had received their
notes in: Leonard

Ir. vwere biiates, perhaps, that no ‘bank notes were iffted in any:
‘part of the kingdom for a fmaller {um than five pounds.: | Paper
money would then, probably, confine itfelf, in every part.of the:
‘kingdom, ‘to the circulation between the different dealers, as much
as it does at prefent in Landon, where no'/bank notes: are> ified’

under ten pounds value ; five pounds being, in moft parts’ of ‘the:

kingdom, a fum which, though it. will purchafe,: perhaps, little:
more than half the. quantity of goods, is as much ‘confidered, and

ts as feldom {pent aff at once, as ten pounds are amidift the ian

expenge of London.

Waxes paper money, it is to: be obferved,’ is pretty much con=
fined to the circulation between dealers and dealers, as at’ London,
there is always pienty of gold and filver. Where‘it extends itfelf to
a confiderable part of the circulation between dealers and confumers,.
as:

39%
CHAP.
way

392 |

THE NATURE AND CAUSES OF

BOOK as in Scotland, and ftill more in North America, it banifhes gold
w——~ and filver almoft entirely from the country ; almoft all the ordinary

tranfactions of its interior commerce being thus carried on by
paper. . The fuppreffion of ten and five fhilling bank notes, fome-
what relieved the fcarcity of gold and filver in Scotland; and the
fuppreffion of twenty fhilling notes, would probably relieve it ftill
more, Thofe metals are faid to have become more’abundant in
America, fince the fuppreffion of fome of their paper currencies.
They are faid, likewife, to have been more abundant before the
inftitution of thofe currencies.

TuovuGu paper. money fhould be pretty much confined to the
circulation between dealers and dealers, yet banks and bankers
might ftill be able to give nearly the fame affliftance to the induftry
and commerce of the country, as they had done when paper money
filled almoft the whole circulation. The ready maney which a dealer
is obliged to keep by him, for .anfwering occafional demands, is
deftined altogether for the circulation between himfelf and other
dealers, of whom he. buys goods. He has no occafion to keep
any by him for the circulation between himfelf and the confumers,
who are his cuftomers, and who bring ready money to him, inftead
of taking any from him. Though no paper money, therefore, was
allowed to be iffued, but for fuch fums as would confine it pretty
much to the circulation between dealers and dealers; yet partly by
difcounting real bills of exchange, and partly by lending upon
cath accounts, banks and bankers might ftill be able to relieve
the greater part of thofe dealers from the neceffity of keeping any
confiderable part of their ftock by them, unemployed and in ready
money, for anfwering occafional demands. They might ftill be
able to give the utmoft affiftance which banks and bankers can,
with propriety, give to traders of every kind,

THE WEALTH OF NATIONS.

je Be. FA in, private, people, it may be faid, from receiving in
payavent,, ne promiffary tobe a banker, for’ any fam, whether
or {mall, when they themfelves are willing to recéive them ; Or,
to reltrain a a ‘banker from iffuing fach notes, when all his ‘neighbouts
are willing to accept of them, is a manifeft violation of'that natural
diberty which it is the proper bufiness: of law, ‘not to infringe; but to
{upport.. Such regulations may, no doybt, 'bé confidered: as in
fome refpect a violation of natural liberty, | But thofe exertions: of
the natural liberty, of a few individuals, which might endanger the
fecurity of the whdle fociety, ‘are, and’ ought’ to be;'‘reftrained by
the laws of all governments; of the moft free,’'as ' well 'as'-of 'the
moft defpotical. The obligation of building party walls, in order
to prevent the communication of fir e, is a violation’ of natural
Aiberty, ‘exay of the fame re with th Hep olationy of the winking
bia ‘which are here propote ed,
shy mph
“A PAPER. money confitling i in bank: notes, iffued by desde of

, -wadoyhted credit, payable. upon demand without any condition, and

riny fagt Always readily, paid as foon as prefented, is, in’ every
-wefpest,. equal in. value to gald and filver money ; fince gold and
dilver money.can at any time be had for it. Whatever 1s either
-bought..or fold. for. fach paper, muft neceffarily be bought or fold
as cheap.asit pot hee been for.gold and filver. | fit

Tus taieaie rv) paper money, it has been bid, by augmenting
the quantity, and. confequently diminifhing the value. of the. whole
_ currency, (neceflasily augments the money. price, of, commodities.
-But.as: the quantity .of gold and filer, which is. taken from the
-eurrency, is always equal to, the quantity of paper whieh i is added
.to it, paper money.daes not neceffarily increafe the quantity of the
- whole currency, From. the beginning . of the. lat, century to the
prefent times, provifions never were. cheaper in Scotland than in

Vou. I. 3 E 1759s

293,

CHAP.

{
|
|
|

394

THE NATURE AND CAUSES OF

BO © K 1759, though, from the circulation of ten and five fhilling bank
iid notes, there was then more paper money in the country than: at

prefent. The proportion between the price of provifions in Scot-
land and that in England, is the fame now as before the great
multiplication of banking-companies in Scotland. Corn is, upon:
moft occafions, fully as cheap in England as in France; though
there is a great deal of paper money in England, and‘fcarce-any in

France. In 1751 and in 1752, when Mr. Hume: publithed his

Political ‘difcourfes, and foon aficr the great multiplication of
paper money in Scotland, there was a very fenfible rife in the price.
of provifions, owing, probably, to the badnefs of the feafons, and,

not to the multiplication of paper. money.

Ir would-be otherwife, indeed, with-a paper ‘money confifting-
in promiffary notes, of which the.immediate:- payment depended,
in any refpect, either upon the good will of thofe who iffued them ;.

" or upon a condition which the holder of the notes: might not always.

have it in his power. to fulfil; or of which the payment was net
exigible till after.a certain:number of years, and which in the mean-.
time bore no intereft. Such a-paper money would, no doubt, fall:
more or lefs.below the value of gold and filver, according as the
difficulty or uncertainty of obtaining: immediate: payment. was.
fuppofed to be greater or lefs ; or. according to the greater or. lefs;
diftance of time at which payment was exigible. .

Some years agothe different: banking companies of ‘Scotland |
were in the practice : of ‘inferting: into their bank notes, .what they .
called an: Optional-Claufe, by.which they promifed payment to the .
bearer, either as- foon:.as the note fhould -be prefthted, or;: in the.
option of the directors, fix months after fuch’ prefentment, together
with the legal intereft for the faid fix months.- The dire¢tors of .
fome of thofe: banks -fometimes took advantage. of this optional .

4, claufe,..

THE WEALTH OF NATIONS.

claufe, and fometimes threatened thofe who demanded gold and
filver in exchange for a confiderable number of their notes, that
they would take advantage of it, unlefs fuch demanders would
content themfelves with a part of what they demanded. . The
promiffary notes of thofe banking companies conftituted at that
time the far greater part of the currency of Scotland, which this
uncertainty of payment neceffarily degraded below the value of
gold and filver money. During the continuance of this abufe,
(which prevailed chiefly in 1762, 1763, and 1764), while the ex-
change between London and Carlifle was at par, that between
London and Dumfries would fometimes be four per cent. againft
Dumfries, though this town is not thirty miles diftant from
Carlifle. But at Carlifle, bills were paid in gold and filver ; whereas
at Dumfries. they were paid in Scotch bank notes, and the uncer-
tainty of getting thofe bank notes exchanged for gold and filver
coin had thus degraded them four per cent. below the value of that
coin.. The fame act of parliament which fuppreffed ten and five
fhilling bank notes, fuppreffed likewife this optional claufe, and
thereby reftored the exchange between England and Scotland to its
natural rate, or to what the courfe of trade and remittances might
happen to make it.

In the paper currencies of Yorkfhire, the payment of fo fmalla
fum as a fixpence fometimes depended upon the condition that the
holder of the note fhould bring the change of a guinea to the perfon
who iffued it ; a condition, which the holders of fuch notes might
frequently find it very difficult to fulfil, and which muft have degraded
this currency below the value of gold and filver money. An act of
parliament, accordingly, declared all fuch claufes unlawful, and
fuppreffed, in the fame manner as in Scotland, all promiffary notes,
payable to. the bearer, under twenty fhillings value,

“3984 THE

395
CHAP.
yd

396
BOOK
Tl.
ee Aieeeed

THE NATURE AND CAUSES OF

Tus paper currencies of North America confifted, not in bank
notes payable to the bearer on demand, but ina government paper,
of which the payment was not exigible till feveral years: after. it was:
ified : And though the colony governments paid no intereft to the
holders of. this paper, they declared it to be, and in fact rendered
it, a legal tender of payment for the full valwe for which it was
iffued. But allowing the colony fecurity to be perfectly good, a
hundred. pounds payable fifteen years hence, for example, in
country where intereft is at fix per cent. is worth lithe more than
forty pounds ready money. To oblige a creditor, therefore, to accept
of this as:full payment for a debt of a hundred pounds actually paid
down in ready money, was an act of fuch violent injuftice, as has
fearce, perhaps, been attempted by the government of any’ other
country which pretended to be free. It bears the evident marks of
having originally been, what the honeft and downright Doétor
Douglas affures us it was, a fcheme of fraudulent debtors to cheat
thew creditors, The government of Penfylvania, indeed, pretended,
upon their firft emiffion of paper money in 1722, to render their
paper of equal value with gold and filver, by enatting penalties
againft all thofe who made any difference in the price of their goods
when they fold them for a colony paper, and when they fold them for:
gold and filver; a regulation equally tyrannical, but much lefs
effectual than that which it was meant to fupport. A pofitive law
may render a fhilling a. legal tender for a guinea; becaufe it may
direct the courts of juftice to difcharge the debtor who has made
that tender. But no pofitive law can oblige a perfon who fells goods,
and who is at liberty to fell or not to fell, as he pleafes, to accept
of a fhilling as equivalent to a guinea in the price of them. Not-
withftanding any regulation of this kind, it appeared by the courfe
of exchange with Great Britain, that a hundred pounds fterling
was occafionally confidered as equivalent, in fome of .the colonies,
to ahundred and thirty pounds, and in others to fo great a fum as

eleven

THE WEALTH OF NATIONS, 397

k eleven hundred pounds currency 5 this difference in th value CHAP.
rs arifing from the difference in the quantity of paper einitted ——
as in the different colonies, and in the diftance and probability
of the term of its final difcharge and redemption.
AS No law, therefore, could be more equitable than the aét of par-
a liament, fo unjuftly- complained of in the colonies, which declared
. that no paper currency to be emitted there in time coming, fhould
be a legal tender of payment.
ce PENSYLVANIA was always more moderate in its emiffions of
paper money than any other of our colonies. Its paper currency
fe accordingly is faid never to have funk below the value of the gold and
i filver which was current in the colony before the firft emiffion of its
. paper money. Before that emiffion, the colony had raifed the de-
. nomination of its coin, and had, by aét of affembly, ordered five
at fhillings fterling to pafs in the colony for ‘fix and three-
“oe pence, and afterwards for fix and eight-pence. A pound colony
si currency, therefore, even when that currency was gold and
Aid filver, was more than thirty per cent. below the value of a pound
~ fterling; and when that currency was turned into paper, it was
en feldom much more than thirty per cent. below that value. The
vl pretence for raifing the denomination of the coin, was to prevent
ay the exportation of gold and filver, by making equal quantities of thofe
ue metals pafs for greater fums in the colony than they did in the mother
ds, country. It was found, however, that the price of all goods from
“Pt the mother country rofe exactly in proportion as they raifed the |
ai denomination of their coin, fo that their gold and filver were exported |
ie as faft as ever.
"6 |
- Tue paper of each colony being received in the payment of the
eth provincial taxes, for the full value for which it had been iffued,

7 it

OE OT eS MR PORTION

~ soe eet

398

THE NATURE AND CAUSES OF

B. ls it neceffarily derived from this ufe fome additional value, over and
toy .above what it would have had, from the real or fuppofed diftance.
‘of the term of its final difcharge and redemption. This additional
value was greater or lefs, according as the quantity of paper iffued.
‘was more or lefs above what could be employed in the payment of
the taxes of the particular colony which iffued it, It was in all the
colonies very much above what could be employed in this manner.

A prince, who fhould enaé that a certain proportion of his
taxes fhould be paid in a paper money of a certain kind, might
thereby give a certain value to this paper money ; even though the
term of its final difcharge and redemption fhould depend aitogether
upon the will of the prince. If the bank which iffued this paper was
careful to keep the quantity of it always fomewhat helow what could
eafily be employed in this manner, the demand for it might be fuch as
to make it even bear a premium, or fell for fomewhat more in the
market than the quantity of gold or filver currency for which it was
iffued. Some people account in this manner for what is called the
Agio of the bank of Amfterdam, or for the fuperior:ty of bank
money over current money; though this bank money, as ‘they
pretend, cannot be taken out of the bank at the will of the owner,
The greater part of foreign bills of exchange muft be paid in bank
money, that is, by a transfer in the books of the bank; and the

dire€tors of the bank, they alledge, are careful to keep the whole

quantity of bank money always below what this ule occafions a
demand for. It is upon this account, they fay, that bank money.
fells for a premium, or bears an agio of four or five per cent.
above the fame nominal fum of the gold and filver currency of the
country. This account of the bank of Amfterdam, however, I
hhave reafon to believe, is altogether chimerical.

A PAPER

@ n iq he —_ rs ae —

THE WEALTH OF NATIONS,

_A paper currency which falls below the value of gold and CHAP
filver coin, does not‘ thereby fink the value of gold and filver, —-\y—_

or occafion equal quantitics of thofe metals to exchange for
a fmaller quantity of goods of any other kind. The propor-
tion between the valiie of gold and filver and that of goods
‘of arty other Kind, depends in all cafes, not upon ‘the nature
or quantity of any particular paper money, which may be current
in any particular country, but upon the richnefs or poverty of |
the mines, which happen at any particular time to fupply the:
great market of. the commercial world. with thofe metals, It
depends upon the proportion between the quantity of labour
which: is necefflary in order. to: bring a certain quantity of
gold. and filver to market, and that which is. neceffary im
order to bring thither a. certain quantity of any other fort of.
goods. .

Tt bankers are: reftrained from* iffuing any circulating bank:
notes, or notes payable to the bearer, for lefs'than a certain:

‘fam; and if they are fubjeéted’ to the obligation of an im-.

mediate and’ unconditional payment’ of fuch bank notes as
foon as prefented, their trade may, with: fafety-to the publick,
be rendered: in all‘ other refpects: perfectly free. The late-
multiplication of banking companies in both parts of the:

‘united ‘kingdom, an event’ by which many people have been:
much alarmed, inftead: of diminifhing, . increafes the: fecurity:
‘of the publick. It-obliges alt of: them to be more circum-
*fpect- in. their conduct, and, by not extending their~ currency.
beyond its due proportion: to their cafh, to guard themfelves :

againft thofe ‘malicious runs,.' which the rivalfhip: of fo many

‘competitors is always ready to: bring upon- them: It- reftrains :
the circulation of: each particular company within: a narrower:
circle, and reduces. their circulating’ notes to a {maller number, .

By,

= ee = ————— ————— ———— = -
a = —-- a . z *

—

Blin SS

eee

a0 nse Sauer peice ae 2 =
ek :

eee

400

THE NATURE AND: CAUSES OF

BOOK By dividing the whole circulation into a greater, number of
~~ parts, the failure of any one company, an accident which, in

the courfe of things, muft fometimes happen, becomes of lef
confequence to the publick, This free competition. too obliges
all bankers to be more liberal in their dealings with their
cuftomers, left their rivals fhould carry them away, In
general, if any branch of trade, or any divifion. of Jkisur, be
advantageous to the publick, the freer and more general the
competition, it will always be the more fo. _

CHAP. Il.

Of the Accumulation of Capital, or of productive and unpros
; . duétive Labour.

HERE is one fort of labour which adds to the value of the

, fubje&t upon which it is beftowed: There is anther which
has no fuch effect. The former, as it. produces a value, may be
called productive; the latter unproductive * labour. Thus the

Jabour of a manufacturer adds generally to the value of the materials

whieh he works upon, that of his own maintenance, and of his
matter’s profit. ‘Ihe labour of a menial fervant, on the contrary,
adds to the value of nothing, Though the manufacturer has his

. wages advanced to him by his mafter, he, in reality, cofts him no

-expence, the value of thofe wages being generally reftored, together
‘with a profit, in the improved value of the fubjeét upon which his
labour is beftowed. But the maintenance of a menial fervant never
is reftored. A man grows rich by employing a multitude of ma-
nufacturerg: He grows poor, by. maintaining a multitude of
menial fervants. - The labour:of the latter, however, has its value,
* Some French authors of great learning and ingenuity have ufed thofe words in a
different fenfe. In the laft chapter of the fourth book, I fhall endeavour to fhow that

their fenfe is an improper one.
and

ye es st

2 cs oP ES BD

hoo ot

THE WEALTH OF NATIONS,

401

and deferves its reward as well as that of the former. But thelabour of CHAP,
the manufacturer fixes and realizes itfelf in fome particular fubject or Ceyp—w

vendible commodity, which lafts for fome time at leaft after
that labour is paft, It is, as it were, a certain quantity of labour
ftocked and ftored up to be employed, if neceffary, upon fome other
occafion, That fubject, or what is the fame thing, the price of
that fubje&t, can afterwards, if neceffary, put into motion a quan-
tity of labour equal to that which had originally produced it. The
labour of the menial fervant, on the contrary, does not fix or
realize itfelf in any particular fubject or vendible commodity. His
fervices generally perifh in the very inftant of their performaice,
and feldom leave any trace or value behind them, for which an
equal quantity of fervice could afterwards be procured.

Tue labour of fome of the moft refpectable orders in the fociety
is, like that of menial fervants, unproductive of any value, and does
not fix or realize itfelf in any permanent fubject, or vendible
commodity, which endures after that labour is paft, and for
which an equal quantity of labour could afterwards be procured.
The fovereign, for example, with all the officers both of juftice
and war who ferve under him, the whole army and navy, are
unproduétive labourers. They are the fervants of the publick,
and are maintained by a part of the annual produce of the induftry
of other people. Their fervice, how honourable, how ufeful, or
how neceffary foever, produces nothing for which an equal quantity
of fervice can afterwards be procured. The protection, fecurity,
and defence of the commonwealth, the effect of their labour this
year, will not purchafe its protection, fecurity, and defence, for
the year to come. In the fame clafs muft be ranked, fome
both of the graveft and moft important, and fome of the moft
frivolous profeffions: churchmen, lawyers, phyficians, men
of letters of all kinds; players, buffoons, muficians, opera-

Vou. I. 3 F fingers,

402

THE NATURE AND CAUSES OF

BOOK fingers, opera-dancers, cc. The labour of the meaneft of thefe

eepen

has a certain value, regulated by the very fame principles which
regulate that of every other fort of labour; and that of the nobleft
and moft ufeful, produces nothing which could afterwards pur-
chafe or procure an equal quantity of labour. Like the decla-
mation of the aétor, the harangue of the orator, or the tune of
the mufician, the work of all of them perifhes in the very inftant
of its production.

Born productive and unproductive labourers, and thofe who
do not labour at all, are all equally maintained by the annual pro«
duce of the land and labour of the country. This produce, how
great foever, can never be infinite, but muft have certain limits.
According, therefore, as a fmaller or greater proportion of it is in
any one year employed in maintaining unproductive hands, the
more in the one cafe and the lefs in the other will remain for the
productive, and the next year’s produce will be greater or fmaller
accordingly; the whole annual produce, if we except the fponta-
neous productions of the earth, being the effect of productive la-
bour:

Tuouvcn the whole annual produce of the land and labour of
every country, is, no doubt, ultimately deftined for fupplying the
confumption of its inhabitants, and for procuring a revenue to them ;
yet when it firft comes either from the ground, or from the hands
of the productive labourers, it naturally divides itfelf into two
parts. One of them, and frequently the largeft, is, in the firft
place, deftined for replacing a capital, or for renewing the pro-
vifions, materials, and ‘firtified work, which had been withdrawn
from a capital; the other for conftituting a revenue either to the
owner of this capital, as the profit of his ftock; or to fome other
perfon, as the rent of his land, Thus, of the produce of land,

one

“es Ge SY

ial a de we we Qo “we

THE WEALTH OF NATIONS, 403

one patt replaces the capital of the farmer; the other pays his C HAP.
profit and the rent of the landlord; and thus conftitutes a revenue pe Ie
both to the owner of this capital, as the profits of his ftock ; and
to fome other perfon, as the rent of his land. Of the produce of
a great manufacture, in the fame manner, one part, and that
always the largeft, replaces the capital of the undertaker of the
work; the other pays his profit, and thus conftitutes a revenue to
the owner of this capital, :

TuaT part of the annual produce of the land and labour of any
country which replaces a capital, never is immediately employed
to maintain any but productive hands. It pays the wages of pro-
ductive labour only. That which is immediately deftined for con-
ftituting a revenue either as profit or as rent, may maintain in-
differently either productive or unproductive hands.

WHuaATEveR part of his ftock a man employs as a capital, he —
always expetts'is to be replaced to him with a profit. He employs

it, therefore, in maintaining productive hands only; and after
having ferved in the function of a capital to him, it conftitutes
arevenue to them. Whenever he employs any part of it in main-
taining unproduétive hands of any kind, that part is, from that
moment, withdrawn from his capital, and. placed in his ftock re-
ferved for immediate confumption.

Unpropucrtive labourers, and thofe who do not labour at.all,
are all maintained by revenue; either, firft, by that part of the
annual produce which.is originally deftined for conftituting a re-
venue to fome particular perfons, either as the rent of land or as
the profits of ftock; or, fecondly, by that part which, though
originally deftined for replacing a capital and for maintaining pro-
ductive labourers only, yet when it comes into their hands, what-
3F 2 ever

404

THE NATURE AND CAUSES OF

B ¢ OK ever part of it is over and above their neceffary fubfiftence, may
+— be employed in maintaining indifferently either productive or un

produétive hands. Thus, not only the great landlord or the rich
merchant, but even the common workman, if his wages are con»
fiderable, may maintain a menial fervant; or he may fometimes
go to a play or a puppet-fhow, and fo contribute his fhare towards
maintaining one fet of unproductive labourers; oc he may. pay
fome taxes, and thus help to maintain another fet, more honour-
able and ufeful, 1iudeed, but equally unproductive. No part of
the annual produce, however, which had been originally deftined:
to replace a capital, is ever directed towards maintaining ‘unpro-
ductive hands, till after it has put into motion its full comple-
ment of productive labour, or all’ that. it could: put into motion
in the way in which. it: was. employed, The workman mutt have
earned his wages.by work done, before he can employ any. part of
them in this manner. That part too is generally but a {mall one.
It is his fpare revenue-only, of which productive labourers. have
feldom. a great deal. ‘They generally have fome, however; and
in the payment of taxes the greatnefs, of. their number may com-
penfate, in fome meafure, the. ftallnefs of their contribution.
The rent of land and the profits of ftock are every where, there-
fore, the principal fources. from which unproduétive. hands derive
their fubfiftence. ‘T:hefe are the two forts of reyenue of which the
owners have generally moft to fpare. They.might both maintain

indifferently either productive or unproductive hands. They feem, ,
however, to have fome predilection for the latter.. The expence of.

a. great lord feeds generally more idle than induftrious people.
The rich. merchant, though with his capital he maintains indu--
ftrious people. only, yet by his expence, that.is, by the employ-

ment of his.reverue, he feeds commonly the very fame fort.as the -

great lord..

THE.

THE WEALTH OF NATIONS,

495

Tue proportion, therefore, between the productive and unpro- © aS P.
ductive hands, depends very much in every country upon the pro- --y—

portion between that part of the annual produce, which, as foon
as it comes either from the ground or from the hands of the pro-~
ductive labourers, is deftined for replacing a capital, and that which
is deftined for conitituting a revenue, either as rent, or as profit.
This proportion is. very different in rich from what it is in poor
countries,

Tus, at prefent, in the opulent countries of Europe, a very large,
frequently the largeft portion of the produce of theland, is deftined for
replacing the capital of the rich and independant farmer; the other
for paying his profits, and the:rent of the landlord. But antiently,
during the prevalency of the feudal government, a very imall portion
of the produce was fufficient to replace the capital employed in cul
tivation. It confifted commonly in a few wretched cattle, main-
tained altogether by the {pontaneous produce of uncultivated land,
and which might, therefore, be confidered as a part of that {ponta-
neous produce. It generally too belonged to the landlord, and was
by him advanced to the occupiers ofthe land. All the reft of the
produce properly belonged to him too, either as rent for his land,
or as profit upon this paultry capital. The occupieis of land were
generally bondmen, whofe perfons .and effects were equally. his pro-

perty. Thofe who were not bondmen were tenants at will,, and:

though the rent which they paid was often nominally little; more
than a quit-rent, it really amounted to the whole produce,of the

land. Their lord could at all times.command their labour in.

peace, and their fervice in war. Though»they lived, at .a. diftance

from his houfe, they were equally dependant upon him. as his re--

tainers who lived in it. But.the whole produce of the land.un-
doubtedly belongs to him, who can difpofe of the labour and fer-

vice of all thofe whom it maintains. . In the prefent ftate of Europe, .
the.

Le RIE RMI SH SH ARE NT Ee aR RI ee src oncoming wc EEO - ae
1

4.06

THE NATURE AND CAUSES OF

BOOK the fhare of the landlord feldom exceeds a third, fometimes not a
tye) fourth part of the whole produce of the land. The rent. of land,

however, in all the improved parts of the country, has been tripled
and quadrupled fince thofe antient times; and this third or fourth

_ part of the annual produce is, it feems, three or four times greater

than the whole had been before. In the progrefs of improvement,
Yent, though it increafes in proportion to the extent, diminifhes in
proportion to the produce of the land.

In the opulent countries of Europe, great capitals are at prefent
employed in trade and manufactures. In the ancient ftate, the
little trade that was ftirring, and the few homely and coarfe
manufactures that were carried on, required but very fmall ca-
pitals. Thefe, however, muft have yielded very large profits. The
rate of intereft was no where lefs than ten per cent. and their
profits muft have been fufficient to afford this great intereft. At
prefent the rate of intereft, in the improved parts of Europe, is
no where higher than fix per-cent. and in fome of the moft im-
proved it is fo low as four, three, and two per cent. Though
that part of the revenue of the inhabitants which is derived from the
profits of {tock is always much greater in rich than in poor coun-
tries, it is becqufe the ftock is much greater: in proportion to the
ftock the profits are generally much lefs.

THat part of the annual produce, therefore, which, as foon
as it comes cither from the ground or from the hands of the pro-
duétive labourers, is deftined for replacing a capital, is not only
much gfeater in zich than in poor countries, but bears a much
greater proportion to that which is immediately deftined for con-
ftituting a revenue either as rent or as profit. ‘The funds deftined
for the maintenance of produftive labour, are not only much
@reater in me former than in the latter, but beara much greater

7 proportion

ys 8

Sm wD om)

THE WEALTH OF NATIONS,

proportion to thofe which, though they may be employed to main-
tain either productive or unproductive hands, have generally a
predilection for the latter, :

Tue proportion between thofe different funds neceflarily deter-
mines in every country the genera), character of the inhabitants as
to induftry or idlenefs. We are more induftrious than our fore-
fathers; becaufe in the prefent times the funds deftined for the
maintenance of induftry, are much greater in proportion to
thofe which are likely to be employed in the maintenance of
idlenefs, than they were two or three centuries ago, Our an-
ceftors were idle for want of a fufficient encouragement to "in-

duftry. It is better, fays the proverb, to play for nothing, than to.

work for nothing. In mercantile and manufacturing towns, where
the inferior ranks of people are chiefly maintained by the employ-
ment of capital, they are in general induftrious, fober, and thriv-
ing; as in many Englifh, and in moft Dutch towns. In thofe
towns which are principally fupported by the conftant or occafional
refidence of a court, and in which the inferior ranks of people are
chiefly maintained by the fpending of revenue, they are in general
idle, diffolute, and poor; as at Rome, Verfailles, Compiegne,
and Fontainbleau. If you except Rouen and Bourdeaux, there is
little trade or induftry in any of the parliament towns of Frances.
and the inferior ranks of people being chiefly maintained by the
expence of the members of the courts of juftice, and of thofe who
come to plead before them, are in general idle ‘and poor., The

great trade of Rouen and Bourdeaux feems to be altogether the:

effect of their fituation. Rouen is neceflarily the entrepdt of al-
moft all the goods which are brought either from foreign coun-
tries, or from the maritime provinces of France, for the confump-
tion of the great city of Paris. Bourdeaux is in the fame manner
the entrepét of the wines which grow upon the banks of the Ga-
ronne, and of the rivers which run into it, one of the richeft wine

countries

407
CHAP.
eon ened

ae ON TINIE

{.
a
4}
.
;

}

408.

THE NATURE AND CAUSES OF

BOOX countries in the world, and which feems to produce the wine
Ua -fitteft for exportation, or beft fuited to the tafte of foreign nations,

Such advantageous lituations nsceffarily attraét a great capital by
the great employment which they afford it; and the employment
ofthis capital is the caufe of the induftry of thofe two cities. In
the other parliament towns of France, very little more capital feems
to be employed than what is neceffary for fupplying their own
confumption; that is, little more than the {malleft capital which can
be employed in them. The fame thing may be faid of Paris,
Madrid, and Vienna. Of thofe three cities, Paris is by far the
moft induftrious; but Paris itfelf is the principal market of all the
manufactures eftablifhed at Paris, and its own confumption is the
principal object of all the trade which it carries on, Londoh,
Lifbon, and Copenhagen, are, perhaps, the only three cities in
Europe, which are both the conftant refidence of a court, and can
at the fame time be,confidered as trading cities, or as cities which
trade not only for their own confumption, but for that of other
cities and countries. The fituation of all the three is extremely
advantageous, and naturally fits them to be the entrepots of a great
part of the goods deftined for the confumption of diftant places,
In a city where a great revenue is fpent, to employ with advantage
a capital for any other purpofe than for fupplying the confumption
of that city, is probably more difficult than in one in which the

' inferior ranks of people have no other maintenance but what they

derive from the employment of fuch a capital. The idlenefs of the
greater part of the people who are maintained by the expence of
revenue, corrupts, it is probable, the induftry of thofe who ought
to be maintained by the employment of capital, and renders it lefs
advantageous to employ a capital there than in other places.
There was little trade or induftry in Edinburgh before the union.
When the Scotch parliament was no longer to be affembled in it,
when it ceafed to be the neceflary refidence of the principal nobility
4 : and

t
é
i
\
C
C
h
t

THE WEALTH OF NATIONS.

and gentry of Scotland, it became a city of fome trade and induftry.
It ftill continues, however, to he the refidence of the principal
courts of juftice in Scotland, of the boards of cuftoms and excife,
&c. A confiderable revenue, therefore, ftill continues to be fpent
in it. In trade and induftry it is much inferior to Glafgow, of
which the inhabitants are chiefly maintained by the employment of
capital. The inhabitants of a large village, it has fometimes been
obferved, after having made confiderable progrefs in manufactures,
have become idle and poor, in confequence of a great lord’s having
taken up his refidence in their neighbourhood.

_THE proportion between capital and revenue, therefore, feems
every where to regulate the proportion between induftry and
idlenefs. Wherever capital predominates, induftry prevails: Where-
ever revenue, idlenefs. Every increafe or diminution of capital,
therefore, naturally tends to increafe or diminifh the real quantity of
induftry, the number of produétive hands, and confequently the
exchangeable value of the annual produce of the land and labour
of the country, the real wealth and revenue of all its inhabi-
tants.

CapPiTAts ace increafed by parfimony, and diminifhed by pro-
digality and mifconduét,

WHATEVER a perfon faves from his revenue he adds to his
capital, and either employs it himfelf in maintaining an additional
number of productive hands, or enables fome other perfon to do fo,
by iendiag it to him for an intereft, that is, for a fhare of the
profits. As the capital of an individual can be increafed only
by what he faves from his annual revenue or his annual gains,
fo the capital of a fociety, which is the fame with that of all the
VoL. &.4' 3G individuals

499
CHAP.
III.
aye

RS SS
————————— =———

|
| 1}
“Be
i |
tM

I
i]
1

410

THE NATURE AND CAUSES OF

BOOK individuals who compofe it, can be increafed only in the fame

il
ferenytoee)

manner,

Parsimony and not induftry is the immediate caufe of ‘the
increafe of ‘capital. Induftry, indeed, provides the fibje€t which
parfimony accumulates. But whatever induftry might acquire,
if parfimony did not fave and ftore up, the capital would never
be the greater.

Parsimony, by increafing the fund which is deftined for the
maintenance of productive hands, tends to increafe the number
of thofe hands whofe Jabour adds to the value of the fubject
upon which it is beftowed. It tends therefore to increafe the
exchangeable value of the annual produce of the land and labour
of the country. It puts into motion an additional quantity of
induftry, which gives an additional value to the annual produce.

Wuart is annually faved is as regularly confumed as what is
annually fpent, and nearly in the fame time too; but it is con-
fumed by a different fett of people. That portion of his re-
venue which a rich man annually fpends, is in moft cafes con- .
fumed ‘by idle guefts, and menial fervants, who leave nothing
behind them in return for their confumption. Tirat portion
which he annually faves, as for the fake of the profit it is im-
mediately employed as a capital, is.confumed in the fame manner,
and nearly in the fame time too, but by a different fett of people,
by labourers, manufacturers, and artificers, who re-preduce with
a profit the value of their annual confumption, His revenue,
we -fhall fuppofe, is paid him in ‘money. Had he fpent the
whole, the food, cloathing, and Jedging whith the whole could
have. purchafed, would have been diftisbuted among the former
fett of people. By faving a part of it, as that part is for the

a fake

THE WEALTH OF NATIONS.

411

fake of the profit immediately employed as a capital either|by © BA AP,
himfelf or by fome other perfon, the food, cloathing, and lodging, wev—~

which may be purchafed with” are neceffarily referved for the latter.
The confumption is the fame, but the confumers are different.

By what a frugal man annually faves, he not only affords
maintenance to an additional number of productive hands, for
that or the enfuing year, but, like the founder of a publick
workhoufe, he eftablifhes as it were a perpetual fund for the
maintenance of an equal number in all times to come. The
perpetual allotment and deftination of this fund, indeed, is not
always guarded by any pofitive law, by any truft-right or deed of
mortmain. It is always guarded, however, by a very powerful
principle, the plain and evident intereft of every individual to whom
any fhare of it fhall ever belong. No part of it can ever after-
wards be employed to maintain any but productive hands, without
an evident lofs to the perfon who thus perverts it from its proper
deftination.

Tue prodigal perverts it in this manner, By not confining
his expence within his income, he encroaches upon his. capital.
Like him who perverts the revenues of fome pious foundation
to profane pu.pofes, he pays the wages of idleneis with thof
funds which the frugality of his forefathers had, as it were, con-
fecrated to the maintenance of induftry. By diminifhing- the
funds deftined for the employment of productive labour,., bs
neceflarily dimimifhes, fo far as depends upon. him, the quantity
of that labour which adds a value to the fubject upon which it
js: beftowed, and, confequenily, the value of the annual produce
of the land and labour of the whole country, the real. wealth
and revenue of its: inhabitants. If the prodigality of fome was
not compenfated. by the frugality of others, the conduct.of every

3G2 prodigal,

THE NATURE AND CAUSES OF

BOOK prodigal, by feeding the idle with the bred of the induftrious,
“—~—_ tends not only to beggar himfelf, but to impoverifh his country,

TuouGH the expence of the prodigal fhould be altogether in
home-made and no part of it in foreign commodities, its effect
upon the productive funds of the fociety would ftill be the fame.
Every year there would ftill be a certain quantity of food and
cloathing, which ought to have maintained productive, employed
in maintaining unproductive hands. Every year, therefore, there
would ftill be fome diminution in what would otherwife have
been the value of the annual produce of the land and labour of
the country.

Tus expence, it may be faid indced, not being in foreign
goods, and not occafioning any exportation of gold and filver,
the fame quantity of money would remain in the country as
before. But if the quantity of food and cloathing, which were
thus confumed by unproductive, had been diftributed among
productive harids, they would have reproduced, together with a
profit, the full value of their confumption. The fame quantity of
money would in this cafe equally have remained in the country,
and there would befides have been a reproduction of an equal
value of confumable goods. There would have been two values
inftead of one.

Tue fame quantity of money befides cannot long remain in
any country, in which the value of the annual produce diminifhes.
The fole ufe of money is to circulate confumable goods. By
means of it, provifions, materials, and finifhed work, are bought
and fold, and diftributed to their proper confumers. The quantity
of money, therefore, which can be annually employed in any
country muft be determined by the value of the confumable goods
annually circulated within it. Thefe muft confift either in the
immediate

THE WEALTH OF NATIONS,

413

immediate produce of the land and labour of the country itfelf; a i
or in fomething which had been purchafed with fome part of ‘that —-+—~

produce. Their value, therefore, muft diminifh as the value of
that produce diminifhes, and along with it the quantity of money
which can be employed in circulating them. But the money
which by this annual diminution of produce is annually thrown
out of domeftick circulation will not be allowed to lie idle. The

intereft of whoever poffeffes it, requires that it fhould be employed.
But having no employment at home, it will, in fpite of all laws
and prohibitions, be fent abroad, and employed in purchafing
confumable goods which may be of fome ufe at home. Its annual
exportation will in this manner continue for fome time to add
fomething to the annual: confumption of the country beyond the
value of its own annual produce. What in the days of its prof-
perity had been faved from that annual produce, and employed
in purchafing gold and filver, will contribute for fome little time
to fupport its, confumption in adverfity. The exportation of gold
and filvey is, in this cafe, not the caufe, but the effect of its declen-
fion, and may even for fome little time alleviate the mifery of that
declenfion.

Tue quantity of money, on the contrary, muft: in every
country naturally increafe as the value of the annual produce
increafes. The value of the confumable goods annually circulated
wichin the fociety being greater, will require a greater quantity
of money to circulate them. A part of the increafed produce,
therefore, will naturally be employed in purchafing, wherever it
is to be had, the: additional quantity of gold and filver neceffary.
for circulating the reft. The increafe of thofe metals will in this
cafe be the effect, not the caufe, of the publick profperity. Gold
and filver are purchafed every where in the fame manner. The
food, .cloathing, and lodging, the revenue and maintenance of

all

ee ee

AOI LO IE OT ACO AO NOON.

414

THE NATURE AND CAUSES OF

B oo K all thofe whofe labour or ftock is employed i in, bringing them from
ti the mine to the market, is the price paid for them in Peru as

well as in England. The country which has this price to pay,
will never be long without the quantity of thofe metale which it
has occafion for; and no country will ever long retain a. quantity
which it has no occafion for.

Waarever, therefore, we may imagine the real wealth and
revenue of a country to confift in, whether in the value of the
annual produce of its: land and labour, as plain reafon feems to
diétate; or in the quantity of the precious metals which circulate
within it, as vulgar prejudices fuppofe; in either view of the
matter, every. prodigal appears to be a publick enemy, and every
frugal man a publick benefactor.

Tue effects of mifeonduct are often the fame as thofe of pro-
digality. Every injudicious and unfuccefsful project in agricul-

ture, mines, fifheries, trade, or nvanufaétures, tends in the fame
manner to diminifh the funds deftined for the maintenance of
productive labour. In every fuch project, though the capital is
confumed by productive hands only, yet, as by the injudicious
manner in which they are employed, they do not reproduce the
full value of their confumption, there muft always be fome dimi-
nution in what would paint have been the productive funds of
the fociety.

Ir can feldom happen, imdeed, that the circumftances of a
great nation ¢an be much affected either by the prodigality or
mifcondu&t of individuals; the profufion or imprudence of fome
being always more than compenifated by the frugality and’ good
conduct of: others,

WITH

THE WEALTH OF NATIONS.

Win regard to profufion, the principle, which prompts to
expence, is the paffion for prefent enjoyment ; which, though fome-
times violent and very difficult to be reftrained, is in general only
momentary and occafional. But the principle which prompts to
fave, is the defire of bettering our condition, a defire which,
though generally calm and difpaffionate, comes with us from the
womb, and never leaves us till we go into the grave, In the
whole interval which feparates thofe two moments, there is {carce:
perhaps .a fingle inftant in which any man js fo perfectly and
compleatly :fatisfied with his fituation, as to be without any
wifh of altcration or improvement of any kind. An augmen-
tation of fortune is the means by which the greater part of men
propofe and wifh to better their condition. It is the means the
moft vulgar and the moft obvious; and the moft likely way of
augmenting their fortune, is to fave and accumulate fome part of
what they acquire, either regularly and annually, or upon fome:
extraordinary occafions. Though the:principle of expence, there»
fore, prevails in almoft all men upon fome occafions, and in
fome men upon almoft all occafions, yet in the greater part of
men, taking the whole courfe of their life at an average, the
principle of frugality feems not only to predominate, but to pre=
dominate very greatly, ;

Wits regard to mifconduc, the number of prudent and fuc-

cefsful undertakings is every where much greater than that of

injudicious and unfuccefsful ones. After all our complaints .of
the frequency. of bankruptcies, the unhappy men who fall into:
_this misfortune make but a very {mall part of the whole: number

engaged: in trade, amd all other forts of bufinefs:; not much more:
perhaps than. one in a. thoufand. Bankruptcy is. pertiaps. the:
greateft and moft humiliating. calamity which can befal an innocent:

man, ‘The -gseatcr part. of men, therefore, are fufficiently care--
ful.

415

CHAP,
Ill.

yet

Me OLE NTE ALLEL LEELA CI seen oer: te rar OES amid

BOOK ful to avoid it,
II. 2
beyond AVOIA the gallows.

THE. NATURE: AND: CAUSES OF

Some; indeed, ‘do not avoid it; as fome do not

GREAT nations are never impoverifhed by private, though they
fometimes are by publick prodigality and mifconduct. The whole,
or almoft the whole publick revenue, is in moft countries employed
in maintaining unproductive hands. Such are the people who
compofe a numerous and fplendid court, a great ecclefiaftical eftab-
lifhment, great fleets and armies,’ who in time of peace produce
nothing, and in time of war acquire nothing which can compenfate
the expence of maintaining them, even while the war lafts. Such
people, as they themfelves: produce nothing, are all maintained
by the produce of other men’s labour. When multiplied, there-
fore, to an unneceflary number, they may in a particular year
confume fo great a fhare of this produce, as not'to leave a fuf-
ficiency for maintaining the productive labourers, who fhould re-
produce it next year. The next year’s produce, therefore, will
be lefs than that of the foregoing, and if the fame diforder fhould
continue, that of the third year will be ftill lefs than that of
the fecond.. Thofe unproductive hands, who fhould be main-
tained by a part only of the fpare revenue of the people, may
confume fo great a fhare of their whole revenue, and thereby
oblige fo great a number to encroach upon their capitals, upon
the func: deftined for the maintenance of productive labour, that
all the frugality and good conduct of individuals may not be able
to compenfate the wafte and degradation of produce occafioned by
this violent and forced encroachment.

Tuts frugality and good conduct, however, is upon moft oc-
cafions, it appears from experience, fufficient to compenfate, ‘not
only the private prodigality and mifconduct of individuals, but
the publick extravagance of government. The uniform, conftant,
4 and

THE WEALTH OF NATIONS,

and uninterrupted effort of every man to better his: condition,

4'7
CHAP.

the principle from which publick and national, as well as private w-y—w

opulence is originally derived, is frequently powerful enough to
maintain the natural progrefs of things towards improvement, in
fpite both of the extravagance of government, and of the greateft
errors of adminiftration. Like the unknown principle of animal
life, it frequently reftores health and vigour to the conftitution, in
fpite, not only of the difeafe, but of the abfurd ste dae of
the doétor.

~ ‘Tue annuak produce of the land and labour of any nation can
be increafed-in its value by no other nteans, but by increafing either
the number of its productive labourers, or the produttive ‘powers
of thofe labourers who had before been: employed: The number
of its productive labourers, it is evident, can never bé mitch
increafed, but in-confequence of an increafe of capital, or of the
funds deftined for maintaining them. The productive powers of
the fame number of labourers cannot be increafed, but in con-
fequence either of forte addition artd improvement 'to thofe machines
and inftruments which facilitate and abridge labour; or of a more
proper divifioi and diftribution of employment. lr either’ cafe
an additional capital is almoft always réquired: It is by mieans
of an additional capital only that the undertaker of any work ‘can
either provide his workmen with better machinery, or make'a ntore
proper diftribution of employment among them. When the work
to be done confifts of a number of parts, to keep every man con-
{tantly employed in one way,, requires a much: greater capital than
where every marris occafionally employed in every different ‘part
of the work. When we compare, thercfore, the ftate of*a nation
at two different periods, and find, that the annual produce of its
land and labour is evidently greater at'the latter than at the former,
that its lands are better cultivated, its manufactures more nume-

Vou. I. 3 H rous

418

BOOK yous and more flourifhing, and its trade more extenfive, we may

THE NATURE AND CAUSES OF

———_ be affured that its capital muft have increafed during the interval

between thofe two periods, and that more-muft have been added to
it by the good conduct of fome, than had been taken from it either
by the private:mifconduct of others, or: by the: publick extravagance
of government. But we fhall find this to have been the cafe. of
almof all nations, in all tolerably quiet and peaceable times,; even
of thofe who have not enjoyed the moft prudent and, parfimonious
governments. To forma right judgement of it, indeed, we mutt
compare the ftate of the country at periods fomewhat diftant from
one another. The progrefs is frequently fo gradual, that, at near
periods, the improvement is not only not. fenfible, but from the
declenfion either of certain branches of induftry, or of certain
diftriéts of the country, things which fometimes happen though the
country in general is in great profperity, there frequently
arifes a fufpicion, that the riches and induftry of the whole
are decaying.

Tue annual produce of the land and labour of England, for

example, is certainly much greater than it was, a little more than

a century ago, at the reftoration of Charles II. Though at

prefent, few people, I believe, doubt of: this, yet during this.

period, five years have feldom pafled away in which fome book
or pamphlet has not been publifhed, written. too with fuch abilities
as io gain fome authority with the publick, and pretending to
demonftrate that the wealth of the nation was faft declining, that
the country was depopulated, agriculture neglected, manufactures
decaying, and trade undone. Nor have thefe publications been
all party pamphlets, the wretched offspring of falfhood and venality,
Many of them have been written by very candid and very intelligent
people; who wrote nothing but what they believed, and for no
other reafon but becaufe they believed it.

THE

natu
end

hap;
paffe
have
impt
expe
Dut
the f
toget
the {
hunc

THE WEALTH OF NATIONS.

419

Tue annual produce of the land and labour of England again, C ve P.
was certainly much greater at the reftoration, than we can fuppofe —\—

it to have been about an hundred years before, at the acceffion of
Elizabeth. At,this period too, we. have all reafon to believe, the
. country. was much more advanced in improvement, than it had been
about a century before, towards the clofe of the diffenfions between
‘the houfes of York and Lancafter. Even then it was, probably,
in a better condition than it had been at the Norman conqueft, and
at the. Norman conqueft, than during the confufion of the Saxon
Heptarchy. Even at this early period, it was certainly a more
improved country than at the invafion of Julius Cefar, when its
inhabitants were nearly in. the fame ftate with the favages in
North America.

In each of thofe periods, however, there was:not only much private
and publick profufion, many expenfive and unneceflary wars, great
per. «oc of the annual produce from maintaining productive to
Ma.ii.uisi unproductive hands ; but fometimes, in the confufion
of civil difcord, fuch abfolute wafte and deftruction of ftock, as
might be fuppofed, not only to retard, as it certainly did, the
natural accumulation of riches, but to have left the country, at the
end of the period, poorer than at the beginning. Thus, in the
happicft. and moft fortunate period of them all, that which has
paffed fince the reftoration, how many diforders and misfortunes
have occurred, which, could they have been forefeen, not only the
impoverifhment, but the total ruin of the country would have been
expected from them? The fire and the plague of London, the two
Dutch wars, the diforders of the revolution, the war in Ireland,
the four expenfive French wars of 1688, 1701, 1742, and 1756,
together with the two rebellions of +715 and 1745. In the courfe of
the four French wars, the nation has contraéted more than a
hundred and forty five millions of debt, over and above all the
3 H2 other

nt siaamenniiiinteeiaialll

itis
C) Pao

429

THE NATURE AND CAUSES OF

B Q0 K other extraordinary annual expence which they oacafioned, fo that
u~— the whole cannot be computed at lefs than two hundred millions.

So great a’ fhare of the annual produce of the land and fabour
of the country, has, fince the revolution, been employed upon
different occafions, in maintaining an extraordinary number of un-
produive hand:. But had not thofe wars given ‘this particular
direction to fo large a capital, the greater part of it would naturally
have been employed in maintaining productive hands, whofe labour
would have replaced, with a profit, the whole value of their
confumption, ‘Fhe value of the annual produce of the land and
labour of the country, would have been confiderably increafed
by it every year, and every year's increafe would have augmented
ftill more thatsof the next year. More houfes would have been
built, more lands would have been improved, and thofe which had
been’ improved’ before would have been bette: cultivated, more
rnanufacétures would have been eftablifhed, and thofe which had
een eftablifhed before would have been more extended; and to
what height the real wealth and revenue of the country might, by
this time, have been raifed, it is not perhaps very eafy even to
imagine.

Bur though the profufion of government muft, undoubtedly,
have retarded the natural progiefs of England towards wealth and
jmprovement, it has not been abie to ftop it. The annual produce
of its land and labour is, undoubtedly, much greater at prefent
than it was either at the reftoration or at the revolution. The
capital, therefore, annually employed in cultivating this land, and
in maintaining this labour, mutt likewife be much greater. In the
midft of all the exactions of government, this capital has been

. filently and gradually accumulated by the private frugality and

good conduct of individuals, by their univerfal, continual, and
uninterrupted effort to better their own condition, It is this effort,
7 protected

THE WEALTH OF NATIONS. —~—s gat

protected by law and allowed by liberty to exert itfelf in the CHAP.
manner that is moft advantageous, which has maintained the —v—
progrefs of England towards opulence and improvement in almoft

all former times, and which, :it is to be hoped, will do fo in alt

future times. England, however, as it has never been bleffed with

a ery parfimonious government, fo parfimony has at no time been

the charatte-iftical virtue of its inhabitants. It is the higheft im-
pertinence and prefumption, therefore, in kings and minifters, to

pretend to watch over the economy of private people, and to

reftrain their expence either by fumptuary laws, or by prohibiting

the importation of foreign luxuries. They are themfelves always,

and without any exception, the greateft fpendthrifts ir the fociety.

Let them look well after their own expence,. and they may fafely

truft private people with theirs. If their own extravagance does not

ruin the ftate, that of their fubjects never will.

As frugality increafes, and prodigality diminifhes. the publick
capital, fo the conduct of thofe, whofe expence juft equals their
revenue, without either accumulating or encroaching, neither
increafes nor diminifhes it. Some modes of expence, however,
feem to contribute more to the growth of puhlick opulence
than others.

Tue revenue of an individual may be fpent, either in things
which are confumed immediately, and in which one day’s expence
can neither alleviate nor fupport that of another; or it may be
fpent in things more durable, which can therefore be accumulated,
and in which every day’s expence may, as he chufes, either alleviate,
or fupport and heighten the effect of that of the following day.
A man of fortune, for example, may either fpend his revenue
in a profufe and fumptuous table, and in maintaining a great number
of menial fervants, and a multitude of dogs and horfes; or con-

tenting

422

THE NATURE AND CAUSES OF

BOOK tenting himfelf with a frugal table and few attendants, he may lay
—~— out the greater part of it in adorning his houfe or his country villa,

in ufeful or ornamental buildings, in ufeful or ornamental furniture,
in cc!leéting books, ftatues, pictures; or in things more frivolous,
jewels, baubles, ingenious trinkets of different kinds; or, what
is moft trifling of all, in amaffing a great wardrobe of fine clothes,
like the favourite ; 1 minifter of a great prince who died a few
years ago. Were: »*.en of equal fortune to fpend their revenue,
the one chiefly in the one way, the other in the other, the magni-
ficence of the perfon whofe expence had been chiefly in durable
commodities, would be continually increafing, every day’s expence
contributing fomething to fupport and heighten the effect of that
of the following day: That of the other, on the contrary, would
be no greater at the end of the period than at the beginning. The
former too would, at th.: end of the period, be the richer man of
the two. He would have a ftock of goods of fome kind or other,
which, though it might not be worth all that it coft, would always
be worth fomething. No trace or veftige of the expence of the
latter would remain, and the effects of ten or twenty years pro-
fufion would be as compleatly annihilated as if they had never
exifted.

As the one mode of expence is more favourable than the other
to the opulence of an individual, fo is it likewife to that of anation.
The houfes, the furniture, the cloathing of the rich, in a little
time, become ufeful to the inferior and middling ranks of people.
They are able to purchafe them when their fuperiors grow weary of
them, and the general accommodation of the whole people is thus
gradually improved, when this mode of expence becomes univerfal
among men of fortune. In countries which have long been rich,
you will frequently find the inferior ranks of people in poffeffion
both of houfes and furniture perfectly good and entire, but of

| which

THE WEALTH OF NATIONS.

which neither the one could have been built, nor the other have
been made for their ufe. What was formerly a feat of the family
of Seymour, is now an inn upon the Bath road. The marriage
bed of James the Ift of Great Britain; which his Queen brought’
with*her from Denmark, as a prefent fit for a fovereign to make
to a fovereign, was, a few years ago, the ornament of an alehoufe
at Dunfermline. In fome ancient cities, which either have been long
ftationary, or have gone fomewhat to decay, you will fometimes
fearce find a fingle houfe which could have been built for its prefent
inhabitants. If you go into thofe houfes too, you will frequently find
many excellent, though antiquated pieces of furniture, which are ftill
very fit for ufe, and which could as little have been made for them.
Nobi< palaces, magnificent villas, great collections of books, fatues,
pictures, and other curiofities, are frequently both an ornament
and an honour, not only to the neighbourhood, but to the whole
country to which they belong. Verfailles is an ornament and an
honour to France, Stowe ana ‘ilton to England. Italy ftilt
continues to command fome fort of veneration by the number of
monuments of this kind which it poffeffes, though the wealth which
produced them has decayed, and the genius which planned them
feems to be extinguifhed, perhaps from not having the fame
employment.

Tue expence too, which is laid out in durable commodities,
is favourable, not only to accumulation, but to frugality. Ifa
perfon fhould at any time exceed in it, he can eafily reform
without expofing himfelf to the cenfure of the publick. To reduce
very much the number of h.; fervants, to reform his table from
great profufion to great frugality, to lay down his equipage after he
has once fet it up, are changes which cannot efcape the obfervation
of his neighbours, and which are fuppofed to imply fome ac-
knowledgement of preceding bad conduct. Few, therefore, of thofe

4 who

423

CHAP.
Ill.

Gene)

424

THE ‘NATURE? AND! CAUSESHUOF

BOOK wlio have once! bedn \fol-tinfortunate! as! to launtlr ‘out “too
enya far into this fort of'\expence) have’ ‘afterwards! the courage

to reform, till ruin and bankruptcy oblige thens.:; Bat if a:perfon
has, at anytime, been: at toogreat aniexpence’ in’! building,
in’ furniture,’ in’ books or pictures)! no! imprudence ‘can he: ine
ferred from his: changing his conduct. Thefe are' things’ in. which
further expence is frequently rendered ‘unneceffary by , former
expences’ and when a perfon ftops fhort;: he’ appears: :to::do

fo, not becaufe“he has exceeded head ~~ but ‘becaufe he has

ppornovsoneeaiils fi & .sanequs jo sol jane

etl’ e gli ‘ py : fot

THE expence, ° befides, ‘that’ ig" laid’ ‘cut in” ahitible com-

‘modities, gives maintenance, ‘commonly, td''a greater nutiber

of people, than’ thdtwhich“is employed in’ the moft™'profate
hofpitality. Of two or three hundred: weight! of proniGatis; whith
may. fometimes be ferved up at a great: feftival, one-half, perhaps,
is thrown tothe dunghill, and there is always.a great deal wafted
and abufed. But if the expence of this entertainment: had been
employed in fetting ta work, mafons, carpenters, upholfterers,
mechanicks, a quantity of provifions, of equal value, would
have been: diftributed: among a till greater number of people,
who would have bought’ them in penny-worths and pound
weights, and not have loft or thrown away a fingle ounce
of them. In the one way, befides, this expence maintains pro-
duétive, in the other unproduétive hands. In the one way,
therefore, it increafes, in the other, it: does not imcreafe,, the
exchangeable value of the annual produce of the land and. labour
of the. country.

I wousp not, however, by all this be underftood: to: mean,
that the one fpecies of expence always betokens a more liberal
or generous fpirit than the other. When a man of forcune

{pends

orcune

fpends

THE WEALTH OF NATIONS,

_fpends his revenue chiefly in hofpitality, he fhares the greater CHAP.
Ill.
part of it with his friends and companions; but ..when he e-y—w

employs it in purchafing fuch durable commodities, he often
fpends the whole upon his own -perfon, and gives nothing
to any body without an equivalent, The latter {pecies of exe
pence, therefore, efpecially when directed towards frivolous
objects, the little ornaments of drefs and furniture, jewels,
trinkets, gewgaws, ‘frequently indicates, not only a trifling, but
a bafe and flfith -difpofition. All that I mean is, that the
one fort of expence, as it always ovcafions, fome accumu-
lation of .valuable commodities, as it is more favourable to
ptivate frugality, and, confequently, to the inereafe of the

publick capital, and as it maintains produétive, yather than -

unproduétive hands, conduces more than the other to the
growth: of publick opulence,

So So
SS SSS ——
ri rs

—--——
*

BOOK ;
‘ll.

THE NATURE AND CAUSES OF

‘CHAP. IV

‘OF Stock lent at’ Interef. fare

HE ftock which is lent .at intereft is always confidered . ag
‘a capital by the lender. He expects that in. due time

it is to be reftored to him, and that in the mean time the bor-

rower is to.pay him a certain annual rent for the ufe of it. The
borrower may ufe it either as a capital, or as a ftock referved for
immediate confumption. ‘If he ufes it as a capital, he employs it
in the maintenance of productive labourers, who reproduce the
value with a profit. “He can, in this cafe, both reftore the capital
and pay the intereft without alienating or encroaching upon any
other fource of revenue. If he ufes it as a ftock referved for im-
mediate confumption, he aéts the part of a prodigal, and diffipates
in the maintenance of the idle, what was deftined for the fupport
of the induftrious. He can, in this cafe, neither geftore, the capital
nor pay the intereft, without either alienating or encroaching upon
fome other fource of revenue, fach as the property or the rent
of land.

Tue {tock which is lent at intereft, is, no doubt, occafionally em-
ployed in both thefe ways, but in the former much more frequently
than inthe latter. ‘The man who borrows in order to fpend will
foon be'ruined, and he who lends to him will generally have occafion

to repent of ‘his folly. To borrow or to lend for fuch a purpofe,

therefore, is in'‘all cafes, where grofs ufury is out of the quettion,
contrary’ tothe intéréft of both parties; and though it no
doubt ‘happens fometimes that people do both the one and
the other; yet, from’ the regard that all men have for their own
intereft, we may be affured, that it cannot happen fo very fre-
quently as we are fometimes apt to imagine, Alk a any rich man

i j ae 2d AV 1 if of

Pe ae ee

THE WRALTH OF NATIONS.

of common prudence, to which of the two forts of people he has
lent the greater part of his: ftock, to;thofe who, he thinks, will
employ it profitably, or to thofe who will {pend it idly, and he will.
laugh at you for propofing the queftion. " Even among borrowers,.
therefore, not the people in the world moft famous for frugality,
the number of the frugal and induftrious: furpaffes confiderably that:
of- the prodigal: and idle.)

“Tae only people to whom ftock is commonly lent, without their:
Being expected to make any very profitable ufe of it, are country’
gentlemen who borrow: upon mortgage. Even they: fcarce ever’
borrow merely to fpend: What they borrow, one may fay, is’
commonly fp ent before they borrow it. They have generally con-.
fumed {8 great‘a: quantity of goods, advanced ‘to them upon credit’
by fhopkeepers ‘and‘tradefmen, that they find it neceffary to borrow:
at intereft in order topay the debt. The capital borrowed replaces the:
capitals of thofe fhopkeepers and tradefmen, which the country gen—
tlemen could not have replaced from the rents of their eftates. It:
ig not properly borrowed in order to be fpent, but in: order to:
replace a capital which had been fpent before.. ,

A.mosT all loans at intereft are made in money, either of°
paper, or of gold and filver. But what the borrower really wants,.
and what the lender really fupplies him with, is, not the money,,.
but the money’s worth, or the- goods which it can purchafe,
If he wants it as a ftock for immediate confumption, it is thofe’
goods only which he can place in that ftock. If he wants it as.
a capital for employing induftry, it is from thofe goods only that-
the induftrious can be furnifhed’ with. the. tools, materials, and’
maintenance, neceffary for carrying on their Work. By means of
the loan, the lender, as it were, affigns to the borrower his right
to a certain portion of: the annual produce of the land and labour-
of the country, to be employed as the borrower pleafes. .

4.1 2. THRE:

428

K
esvaww preifed, of money which can be lent at intercit in any country,

THE NATURE AND CAUSES OF
Tue quantity of ftock,' therefore, '‘or, as it is commonly. ox~

is not regulated by the value of the money, whether paper | or
coin, which ferves as the inftrument of the different. loans:
made in that country, but by the value of that part of the
annual produce which, as foon ad it comes eithes <froms the:
ground, or from the hands of the productive labourers, ie/deftined
not only for replacing a capital, but fuch a capital as the owner
does not care to be at the trouble of employing himfelf. . As.fuch
capitals are commonly lent out and’ paid back’ ‘in: money, they
conftitute what is called the monied intereft, It is diftinét,' not
only from the landed, bug from the trading and manufacturing
interefts, as in thefe laft the owners themfelves: employ their own
capitals. Even in the monied intereft, however, the money, is,
as it were, but the deed: of aflignment, which: conveys from, onc
hand to another thofe capitals which the: owners do: not: care to
employ themfelves. ‘Thofe capitals may be greater. in almoft: any
proportion, than the amount of the money which, ferves as the
inftrument of their conveyance; the fame pieces of money fuce
ceffively ferving for many different loans, as: well: as: for many
different purchafes. A, for example, lends to W a thoufand
pounds, with which W immediately purchafes of B a thoufand
pounds worth of goods. B having no occafion for the money
himfelf, lends the identical pieces to X, with which X immediately
purchafes of C another thoufand pounds warth of goods. ;, C in the
fame manner, and for the fame reafon, lends them to Y, who
again purchafes goods with them of D. In this manner the fame
pieces, either of coin, or of paper, may, in the courfe of a few

days, ferve as the inftrument of three different loans, ‘and of three -

different purchafes, egch: of which is, in value, equal to the whole
amount of thofe pieces. What the three monied men A; B, and

C, affign to the three borrowers, W, X; Y, is the power of

making thofe purchafes. In this power confift both the value and
the

THE WEALTH OF NATIONS,

429

the ufe.of the loans. The ftock lent by the three monied. men, is CHAR
equal to the value of the goods which can be purchafed with it, —+—

and is three times greater than that of the money with which the
purchafes are made. Thofe loans, however, may be all perfectly
well decured, the gaods purchafed by the different debtors being
{9 employed, as. im due time, to bring back,. with a profit, an
equal:value eithar.af coinior of paper. And as the fame picces «:/
money -can thus ferve as, the inftrument of different loans to.
three, or, forthe fame, seafon, to thirty times their yalue,
fo they may: likewife fucceflively ferve as the inftrument. of re=
payment. |

A capita lent at intereft may, in this manner, be confiderzd
as an‘affignment from the lender to the borrower. of a certain
confiderable portion of the annual produce’; upon condition that the
borrower:‘in return fhall, during the continuance of the lean, annually
affign to the lender a fmaller portion, ‘called the intereft ; and at the
end .of ita portion equally. confiderable with that which had
original’: :been affigned .to' him, called the repayment. Though
money, cither coin: or paper, ferves generally as. the deed of
affignment both to the fmaller, and to the more confiderable
_ portion, it is itfelf altogether different from what is afligned
by its:

“In proportion as that fhare of the aniiiiz! produce: which, as
foon as‘jt comes either from the ground, o: itom the hands of the
productive labourers, is deftined for replacing a capital, increafes
in any country, what is called the monied. intereft: naturally
increafes with it... The increafe of thofe. particular; capitals from
which the owners with to derive a revenye, without, being: at
the trouble of employing them theméfelves, naturally accompanies
we general: lasseal of eins or in othar words, as, ftack

7 J tite increafes,

430 THE NATURE ,.AND CAUBES: OF

BOOK increafes, the quantity, of {tack to be lent at interet hgvowe gindeally
yn greater and greater. 2)... Ba des fagot'

As the quantity of ftock: to, be lent at intereft, increafes,, the ins:
tereft, or the price. which muft be paid. for the ufe of that ftock;:
neceffarily diminifhes, not, only from: thofe: general caufes which:
make the market price of things commonly diminith as.their quan:
tity increafes, but from other caufes which are peculiar to- this:
particular cafe. As capitals increafe in any country, the profits
which can be made by employing them neceffarily diminifh.‘. It:
becomes gradually more and more difficult to find within the coun-.
try a profitable method of employing any new capital. There:

arifes in confequence a competition between different capitals, the. Ph
owner of one endeavouring to get poffeffion of that employment part
which is occupied by another. But upon moft occafions. he can: toh
hope to juftle that other out of this employment, by ‘no, other, part
means but by dealing upon more reafonable terms. . He muft not: proj
only fell what he deals in fomewhat cheaper, but in order to, get it, exhe
to fell, he muft fometimes too buy it dearer. The demand for. pro-. cent
ductive labour, by the increafe\ of the funds, which are. deftined: quiai
for maintaining it, grows every day greater and greater. Labourers: fipp
eafily find: employment, but the owners of capitals find. it difficult, the”
to get labourers to employ. Their competition raifes the i iy ate j
of labour,. and finks the profits of ftock. But when the, prof imp
which can be made by the ufe. of a capital are in this. manner: dis, ' fmal
minifhed as:it. were, at both ends, the. price which can, be. paid for pout
the ufe of it, that.is the rate of, intereft, miuft Bi apenas be, din. pout
minifhed with t them.. aii ahriiiner oun) five :
iit y the |
Mr. Locke, Mr, ba and: Mr. Montefquion, as wel as: +:mange that
other writers, , feem. to.. have; imagined. that. the: increafe-of. tho. porti
quantity. of. gold and. filver;,in. confequence-of: the, difcovety'of

4. hos the.

THE WEALTH oF NATIONS.

431

the" Spaniti’ Wet Indies,’ was ‘the’ real ‘caufe’ of the towering’ ‘of C 4 PP:

the rate of intereft through the greater part of Europe. “ Thofe
metals, they fay, having become of lefs value themfelves, the ufe
ofrany particular portion ‘of ‘them feceffarily became of lefy value
too) dd ‘con fequently ‘the: privée which ‘could'bé paid for it. ‘This
notion, which at: firft fight? feems’ {0 ‘plaufible; ‘has’ ‘been fo’ fully
expofed by Mr.‘Hume)’ that it is,” perhaps, unneceffary to fay any
thirig more’ about’ it. °° The following very fhort and plain argu-
ment,‘ however, ‘may ferve to’ explain more diftinétly’ the fallacy
which feems'to have mifled thofe gentlemen.

BEFORE the difcovery of the Spanith Welt Indies, ten. per cent.
feemns'to have been the common rate of intereft through the greater
part of Europe. It has fince that time in different countries funk
to'fix, ‘five, four, and three per cent. Let us fuppofe that in every
particular country the value of filver has funk precifely in the fame
proportion as the rate of intereft and that in thofe coufitries, for
exatnple, where intereft has been reduced from ten to five per
cent.‘ the fame quantity of filver can now purchafe juft half the
quantity of goods which it could have purchafed before. This
fippofition wilt not, I believe, be fotind any where agreeable to
the'tiuth, but'it# the moft favourable to the opinion which we
are going to examine; and even upon this fuppofition it is utterly
impoffible that the lowering of the value of filver could have the
fmalleft teridency to lower the rate of intereft. If a’ hundred
” pduihds' are’‘in' thofe’ countries now of no more value than fifty
pounds were'then; ten pounds muft now be of no more. value than

five pounds were then. Whatever were the caufes which lowered

the value of the capital, the fame muft neceflarily have lowered
that of the intereft, and exaétly in the fame pfoportion?” ‘The prto-
portion between the value of the capital and’ that of the intereft,

mult have iremained the fame," though the rate had: néver been’

altered.

THE NATURE AND CAUSES OF

BQOK altered. By altering the rate, on the contrary, the proportion
_, between thofe two values is neceflarily altered. If @ hundred

pounds now ‘are worth ‘no ‘more than fifty wese then, five pounds
now can be worth no more than two pounds ten ‘hillings were
then, By feducing the rate df intereft, therefore, from ten to
five'per cent.'we.give for the ufe of a capital, which is fuppofed to
be equal to-one-half of its. former value, an. intereft which is equal
to. one-fourth only of the value of the former intereft.

Any increafe in the quantity of filver, while that of the com-
modities circulated by means of it remained the fame, could have
no other effect-than to diminith. the value of that metal, The no-
minal value of all forts of goods would. be greater, ‘but their real
value would be precifely the-fame as before. They would be ex-
changed for a greater number of-pieces of filver; but the quantity
of labour which they could:eommand, the number of people whom
they could maintain and employ, would be precifely the fame.
‘Fhe capital of the country would be the fame, though a greater
number of pieces might be requifite for conveying any equal
portion of it from one hand to another. The deeds of affignment,
like the- conveyances of a'verbofe attorney, would be more cum-
berfome, but the thing afligned would be précifély the fame as
before, and could produce only the fame effects. The funds for
maintaining productive labour being the fame, the demand for it
would be the fame. Its pricé or wages, therefore, though no-
minally. greater, would really be the fame. They’ would be paid
in. a greater number of pieces of filver; but they would purchafe
only-the. fame quantity of.goods. The profits of ftock would be
the fame both. nominally and really. The wages of labour are
coramonly computed by the quantity of filver which: is' paid to the
labourer. ‘When that is increafed, therefore, his wages appear
tobe increafed, though they may fometimes be: no greater than

before.

‘DH Ei WEALTH, OF) NATIONS,

433

hefoves.::.Bus:the profits, of {tock arenot computed by the num, GH AP,
heriof, pieces of filver| with .which they are paid,. but by the. prqae ““—~

portion ‘which: thofe, pieces bear to the .whole, capital employed.
Thus, ip. particular country. five, fhillings,a week. are, faid to, be
the,,common wages, of labour, and ten percent. the common
profits of ftock.,.But, the-whole capital of the country being the
fame as before; the competition between the different capitals of
individuals into which it ;was divided would likewife be the fame.
They would all trade with the fame advantages and difadvantages.
The common proportion between capital and profit, therefore,
would be the fame, and confequently the common intereft of mo-
ney; what can commonly be given for’ the ufe of money being
neceflarily, regulated by what can commonly be made by the ufe
of it. |

. Any increafe.in the quantity of commodities annually circulated
within, the country, while that of. the. money. which circulated
them, remained the fame, would, on the contrary, produce many
other important. effects, befides that of raifing the. value of the
money.:) Fhe. capital of the country, though it might nominally
be.the fame,..would really be augmented. It might continue to be
exprefied. by the fame quantity of money, but.it would command a
greater, quantity of labour. The quantity of productive labour
which; it could. maintain and employ would be increafed, and con-
fequently the demand for that labour. Its wages would naturally
rife witly the demand, and yet might appear to fink, ‘They might
he paid with a fmaller quantity of money, but that fatter quantity
mnighk purchafe a greater quantity of goods. than a: greater had
dong before. The profits of {tock would bediminifhed both really
and jm appearance, ‘Fhe whole capital of the:country being aug-
mented, .the competition: between the different capitals of which
it. was,compofed, woul? naturally be augmented along with» it.

Vou. I. 3K The

434

THE NATURE AND CAUSES OF

BOOK The owners of thofe particular capitals would be obliged to content
iy + themfelves with a fmaller proportion of the produce of that labour

which their refpective capitals employed. The intereft of money,
keeping pace always with the profits of ftock, might, in this man-

ner, be greatly diminifhed, t!:ough the value of money, or the

quantity of goods which any particular fum could purchafe, was.
greatly augmented.

In fome countries the intereft of money has been prohibited by
law. But as fomething can every where be made-by the ufe of
money, fomething ought every where to-be-paid: for the ufe of it:.
This regulation, inftead of preventing; has been found from expe--.
rience to increafe the evil of ufury-; the-debter being obliged to-,
pay, not only for the ufe of the money,. but for the rifk which-his’.
creditor runs by accepting a compenfation for that ufe. He is.
obliged, if one may fay. fo, to. infurs. his creditor from. the.
penalties. of ufury,

In. countries where intereft is: permitted, tlie Jaw, in: order to.
prevent the. extortion of ufury, generally: fixes the higheft rate.

which can be taken. without-incurring a:penalty.. This rate. ought.

always to be fomewhat above the loweft market price, or the price.
which: is commonly. paid:for the ufe of; money: by. thofe who can:
give the moft- undoubted fecurity. If this legal rate fhould be fixed

below the loweft market: rate, the effects.of this.fixation muft be-
nearly the -fame as thofe of, a.total prohibition of intereft. The
creditor. will not lend his money..for lefs than the. ufe of. it:is worth;:
and the debtor muft pay.him for the rifk which-he runs by: ace.

cepting the full value of that ufe. If it is fixed precifely at the.

loweft market price, it.ruins with honeft people, who. refpect the.

laws of their country, the credit of all thofe who cannot give the..

very beft fecurity, and obliges them to. have recourfe to exorbitant

ufurers, .

THE WEALTH OF NATIONS,

ufurers, Ina country, fuch as Great Britain, where money is
lent to government at three per cent. and to private people upon
good fecurity at four and four and a half; the prefent Jegal rate,
five per cent. is, perhaps, as proper as any.

Tur. legal rate, it isto be obferved, though it ought to be tome-
what above, ought not to be much above the loweft market rate.
If the legal rate of intereft in Great Britain, for example, was
fixed fo high as eight or ten per cent. the greater part of the money
which was ‘to be lent, would be lent to prodigals and projectors,
who alone would be willing ‘to give this high intereft. Sober
people, who will give for the vfe of money nc more than a part
of what they are likely to make by the ufe of it, would not venture
into the competition. A great part of the capital of the country
would thus be kept outiof the hands which were moft likely to make
a profitable and advantageous ufe of it, and thrown into thofe
which were moft likely to wafte and deftroy it. Where the legal
rate of intereft, on the contrary, is fixed but a very little above the
loweft market: rate, fober people are univerfally preferred, as bor-
rowers, to prodigals and projectors. The perfon who lends
money gets nearly as niuch intereft from the former as he dares to
take from the latter, and his money is much fafer in the hands of
the one fett of people than in thofe of the other. . A great part of
the capital of the country is thus thrown into the hands in which
it is moft likely to be employed with advantage.

No law can reduce the common rate of intereft below the.
loweft ordinary market rate at the time when that law is made. Not-
withftanding the edict of 1766, by which the French king attempted
to reduce the rate of intereft from five to four per cent. money
continued to be lent in France at five per cent.; the law being
evaded in feveral different ways.

3K 2 THE

435
CHAP.
——

436
BOOX
———

THE NATURE AND CAUSES OF

Tue ordinary market price of !and, it isto be obferved, depends
every where upon the ordinary market rate of intereft. The per
fon who has a capita} from which he wifhes to derive a revenue,
without taking the trouble to ermploy it himfelf, deliberates whether
he fhould buy land with it, or lend it out at intereft, The fupecicr
fecurity of land, together with fome other udvantages which al-
moft every where attend upon this fpecies of property, will generally
difpofe him to content himfelf with a fmallez revenue from land,
than what he might have by lending out his money at intereft.
Thefe advantages are fufficient to compenfate a certain differ.
ence of revenue; but they will compenfate a certain difference
only; and if the rent of land fhouid fall fhort of the intereft of
money by a greater difference, nobody would buy land, which
would foon reduce its ordinary price, On the contrary, if the
advantages fhould much more than compenfate the difference,
every body would buy land, which again would foon raife its ordi-
nary price. When intereft was at ten per cent. land was com-
monly fold for ten and twelve years purchafe. As intereft funk

to fix, five, and four per cent. the price of land rofe to twenty,
five and twenty, and thirty years purchafe. The market rate of
antereft is higher in France than in England; and the common
price of land is lower. In England it commonly fells at thirty; in
France at twenty years purchafe,

as'o ¢

= 8

- — so 2

THE WEALTH

OF NATIONS,

CHAP. V.
| Of the different Employment of Capitals.

HOUGH oll capitals are deftined for the maintenance of CHAP,
productive labour only, yet the quantity of that labour, aia eas

which equal capitals are capable of putting into motion, varies
extreamly according to the diverfity of their employment; as does
likewife the value which that employment adds to the annual pro-
duce of the land and labour of the country.

A caPpiTaL may be employed in four different ways: either,
firft, in procuring the rude produce annually required for the ufe
and confumption of the fociety; or, fecondly, in manufacturing
and preparing that rude produce for immediate ufe and confump-
tion; or, thirdly, in tranfporting either the rude or manufactured
produce from the places where they abound to thofe where they
are wanted; or, laftly, in dividing particular portions of either
into fuch fmall parcels as fuit the occafional demands of thofe who
want them. In the firft way are employed the capitals of all thofe
who undertake the improvement or cultivation of lands, mines,
or fifheries; in the fecond, thofe of all mafter manufacturers ;
in the third, thofe of all wholefale merchants; and in the
fourth, thofe of all retailers. It is difficult to conceive that 2
capital fhould be. employed in any way which may not be clafled
under fome one or other of thofe four,

Eacu of thofe four methods of employing a capital is effentially
neceflary either to the exiftence or extenfion of the other three,
or to the general conveniency of the fociety. |

7 UNLESS

eee ee ee ees

ee =

2 ne

THE NATURE AND CAUSES OF

Unvess a capital was employed in furnifhing rude produce to a
certain degree of abundance, neither mar factures nor trade of
-any kind. could exift.

“UNLeEss a capital was employed in manufacturing that part of
the rude produce which requires a good deal of preparation before
it can be fit for ufe and confumption, it either would never be
produced, becaufe there could be no demand for it; or if it was
produced fpontaneoufly, it would be of no value in veneer | iy
could add nothing to the wealth of the fociety.

Untess a capital was employed in tranfporting either the rude
or manufactured produce from the places where it abounds to
thofe where it is wanted, no more of either could be produced
than was neceffary for the confumption of the neighbourhood.
The capital of the merchant exchanges the furplus produce of
one ace for that of another, and thus encourages the induftry
and increafés the enjoyments of both.

Unvess a capital was employed in breaking and dividing certain
portions either of the rude or manufactured produce, into fuch,
{mall parcels as fuit the occafional demands of thofe who want
them, every man would be obliged to purchafe a greater quantity
of the goods he wanted, than his immediate occafions required.
If there was no fuch trade as a butcher, for example, every man
would be obliged to purchafe a whole ox or a whole fheep at a
time. This would generally be inconvenient to the rich, and much
more fo to the poor: If a poor workman was obliged to purchafe a
month’s or fix months provifions at a time, a great part of the ftock
which he employs as’a capital, in the inftruments of his trade, or in
the furniture of his thop, and which yields him a revenue, he would
be forced to place in that part of his ftock which is referved for

4 immediate

THE WEALTH OF NATIONS,

439

immediate confumption, and which yields him no revenue. CHAP.
Nothing can be. more convenient for fuch a perfon than to be able —\—~

to. purchafe. his fubfiftence from day to day, or even from hour to
hour as he wants it. He is thereby enabled to employ almoft
his whole ftock as a capital. He is thus enabled to furnifh work
to a greater value, and the profit which he makes by it in this way
much more than compenfates the additional price which the profit
of the retailer impofes. upon the goods. The prejudices of fomé
political writers againft fhopkeepers and ‘tradefmen, are altogether
without foundation. So far is it from being neceflary either to
tax them.or to reftrict their numbers, that they can never be
multiplied fo:as to hurt.the publick, though they may fo as to
hurt.one another. The quantity of grocery goods, for example,

which can be fold in a particular town, is limited by the demand :

of that town and neighbourhood. The capital, therefore, which
can be employed in the grocery. trade cannot exceed what is fuf-
ficient to purchafe that quantity. If. this capital. is divided
between two different grocers, their competition will tend to. make
both of them fell cheaper, than if it were in the hands of one only;
and if it. were divided among twenty, their competition would: be
jut fo much the greater, and the chance of their combining toe
gether, inorder to .raife the price, juft fo much the lefs. Their
competition .might perhaps ruin fome of themfelves; but to take
care of this is the bufinefs of the parties concerned, and .it may
fafely be trufted to their difcretion. It can never hurt either the

confumer, or the producer; on the contrary, it muft tend to make.:
the retailers both fell cheaper and buy dearer, than if the whole :
trade was monopolized .by one or two perfons. Some of them, .
perhaps, may fometimes decoy a weak .cuftomer to buy what he

has no occafion for.. This evil, however, is of too little impor-
tance to deferve the publick attention, nor would it neceflarily be
prevented by reftricting their numbers. It is not the multitude

of,”

THE NATURE AND CAUSES OF

B 9° K, of ale-houfes, to give the moft fufpicious example, that occafions
i——w a general difpofition to drunkennefs among the common people ;

but that difpofition arifing from other caufes ronmuamticd gives em-
ployment to a multitude of ale-houfes.

Tue perfons whofe capitals are employed in any of thofe four
ways are themfelves productive labourers. Their labour, when
properly direéted, fixes and realizes itfelf in the fubject or vendible
commodity upon which it is beftowed, and generally adds to its
price the value at leaft of their own maintenance and confumption.
The profits of the farmer, of the manufacturer, of the merchant,
and retailer, are all drawn from the price of the goods which the
two firft produce, and the two laft buy and fell. Equal capitals
however, employed in each of thofe four different ways, will put
into motion very different quantities of productive labour, and aug-
ment too in very different proportions the value of the annual
produce of the land and labour of the fociety to which they
belong.

Tue capital of the retailer replaces, together with its profits,
that of the merchant of whom he purchafes goods, and thereby en-
ables him to continue his bufinef$. The retailer himfelf is the only
productive labourer whom it employs. In his profits, confifts the
whole value which its employment adds to the annual produce of
the land and labour of the fociety. :

Tue capital of the wholefale merchant replaces, together with
their profits, the capitals of the farmers and manufacturers of whom
he purchafes the rude and manufactured produce which he deals
in, and thereby enables them to continue their refpective trades.
It is by this fervice chiefly that he contributes indirectly to fupport
the productive labour of the fociety, and to increafe the value of
its

THE WEALTH OF NATIONS, 44t

its annual produce. His capital employs. too the failors: and C RAM
carriers who tranfport his goods from one place to another, w-+y—w
and it augments the price of thofe goods by the value, not only

of his profits, but of their wages. This is all the productive

labour which it immediately puts into motion, and all the value

which it immediately adds tothe annual produce, Its operation

in both thefe refpeéts is a good deal fuperior to that of the capital

of the retailer.

Part of the capital of the mafter. manufactureris employed as a
fixed capital in the inftruments of his trade, and replaces, together
with, its profits, that of fome other artificer of whom he purchafes
them. Part of his circulating capital is employed; in purchafing
materials, and replaces, with their profits,.the capitals of the farmers
and miners.of whom he.purchafes them. But a great. part of it is
always, either annually, or in a much fhorter period, diftributed
among. the different workmen whom he employs. It augments
the value of thofe materials by their wages, and by their mafters
profits upon the whole ftock of wages, materials, and inftruments
of trade employed in the bufinefs. It. puts into motion, there-
fore, a. much greater quantity of productive labour, and adds a
much greater value to the annual produce of the land and labour
of the fociety, than. an equal capital in the hands of any whole--
fale merchant.

No equal capital puts into motion a greater quantity of productive:
labour than that of the farmer. Not only his labouring fervants, .
but his labouring-cattle, are produétive labourers. {n agriculture.
too nature labours along with man ; and though hex labour cofts no

- expence, its produce has its value, as well as that of the moft expen-
five workmen. The moft important operations of agriculture feem
intended, not fo much to increafe, though they do that too, as to.

Vat, I, 3.L. direct:

44a

THE NATURB AND CAUSES OF

BOOK direct the Fertility OF nature towards the production of the plants
ct, moft profitable to man. A field overgrown with brlars and brambles

may fréquently produce as great a quantity of vegetables as the
Belt cultivated vineyard or coin field, Planting and tillage fres
quently regulate more than they animate the active fertility of
nature; ard after all their labour, 4 great part of the work always
remains to be done by her. The labourers and labouring cattle,
therefore, employed in agriculture, not only occafion, like the
workmen in manufactures, the reproduction of a value equal to
their own confumption, or to the capital whieh employs them,
together with its owtiérs profits; but of a ittuch greater value, Over
arid above the capital of the faimer and all its profits, they regue
larly oceafion the reproduction of the rent of the landlond. This
rent may be confidered as the produce of thoft powers of nature,
the ufe of which the landlord lertds to the farmer. It is greater
or finaller according to the fuppofed ‘extent of thofe powers, or,
in other words, according to the fappofed natural or improved
fertility of the land. It is the work of nature which remains after
deducting or ‘compénfating ‘every thing which can be regarded ae
the work of tah. It is feldom tefs than a fourth, and frequently
thore than a third of the whole produce, No équal quantity of
productive labour employed in manufactures can ever occafion {fo
great a reproduction, In them natufe does nothing; man does
all; and the reproduction muft always be in proportion to the
ftrength of the agents that occafion it, The capital employed in
agriculture, therefore, not dhly puts into motion a greater quantity
of productive labour than any equal capital employed.in manu-
actures, but in proportion too to the quantity of produétive labour
which it employs, it adds‘a much greater value to the arinual pro-
duce of the land and labour of the country, 'to the red] wealth
and revenue of its inhabitants, Of all ‘the ways in which :a

7 - \@apital

Sraetnahed OB

-THE WEALTH OF NATIONS.

443

gapital. can be sraployed, it is by far the molt advantageous to the CH A P.

fopiety. ,

Tur capitals entplayed in the agriculture and’ in the retail trade
of any fociety, muft elways refide within that fociety. Their em-
ployment is confined almoft to a precife {pot, to the farm, and
to the Miop of the retailer, They mutt generally too, though

there are fame exceptions to this, belong to refident recta of
tbe focicty..

Tar capital of a wholefale mierchant, on the contrary, feems
to have no fixed or neceffary refidence any-where, but may wander
, bout from place to place, according as it can either buy cheap or

fell dear

Tue capital of the manufacturer muf€ no doubt refide where:

the manufacture is carried on ; but where this thall be, is not always
meceflarily determined. ‘It may frequently be at a great diftance
both from the place where the materials grow, and from that.
where the compleat manufacture is confumed. Lyons is very difs
tant both from the places which afford the materials of its manu-
fa&tures, and from thofe which confume them, The people of
fafhion in Sicily are cloathed in filks made in other countries, from
the materials which their own produces. Part of the wool of Spain
is manufactured in Great Britain, and. fome part of that cloth is
afterwards fent back to Spain.

Wueruer the merchant whofe capital exports the furplus pro.
duce of any fociety be a native or a foreigner, is of very little im-
portance. If he is a foreigner, the number of their. praduétive:
dabourers jis neceffarily lefs than if he had been a native by one:
man wr and the value of their annual. produce, by. the. pro-

3L2 fits:

emymend

A4d

THE NATURE AND CAUSES OF

BOOX ‘fits of that one man. ‘The failors or carriers whom he employs

may {till belong indifferently either to his country, or to their
‘country, or to fome third country, in the fame manner asif he had
been a native. The capital of a foreigner gives.a value to their
-furplus produce equally with that of a native, by exchanging it for
fomething for which there is a demand at home. It as effectually
replaces the capital of the perfon who produces that furplus, ‘and.as

effe€tually enables him to continue his bufinefs ; the fervice by which

the capital of a wholefale merchant chiefly contributes to fupport
the productive labour,. and to augment the value of the annual

-produce of the fociety to which he belongs.

Ir is of more confequence that the capital of the manufaCturer
fhould refide within the country. It neceffarily puts into motion
a greater quantity of productive labour, and adds a greater value to
.the annual produce of the land and labour of the fociety. It may,
however, be very ufeful to the country, though it fhould not refide
within it. The capitals of the Britifh manufacturers who work
up the flax and hemp annually imported from the coafts of the
Baltick, are furely very ufeful to the countries which produce them.
Thofe materials are a part of the furplus produce of thofe countries
which, unlefs it was annually exchanged for fomething which is
in demand there, would be of no value, and would foon ceafe to
be produced. ‘The merchants who export it, replace the capitals of
the people who produce it, and thereby encourage them to continue
the production ; and the Britifh manufacturers replace the capitals
of thofe merchants.

A PARTICULAR country, in the fame manner as a particular
perfon, may frequently not have capital fufficient both to improve
and cultivate all its lands, to manufacture and prepare their whole
rude produce for immediate ufe and confumption, and to tranfport
4 the

THE WEALTH OF NATIONS, — 445

‘the furplus part either of the rude or manufactured produce to CHAP.
‘thofe diftant markets where it can be exchanged for fomething fot , ya
‘which there is a demand at-home. The inhabitants of many
‘different parts of Great Britain have not capital fufficient to im-

prove and cultivate all their lands.» The wool of the fouthern

counties of Scotland is, a great part of it, after.a long land car-

riage through very bad roads, manufactured in Yorkfhire, for want

of a capital to manufacture it'at home. There are many little
manufacturing towns in Great Britain, of which the inhabitants

have not capital fufficient to tranfport the produce of their own

induftry to thofe diftant markets where there is demand and con-
fumption for it. If there are any merchants among them, they

are properly only the agents of wealthier merchants who refide

in fome of the greater commercial cities. |

When the capital of any country is not fufficient for all thofe
three purpofes, in proportion as a greater fhare of it is employed in
agriculture, the greater will be the quantity of productive labour which
it puts into motion within the country; as will likewife be the:value
which its employment adds to the annual produce of the land and
‘labour of the fociety. After agriculture, the capital employed in
manufactures put into motion the greateft quantity of productive
dabour, and adds the greateft value to the annual produce. That

‘which is employed in the trade of exportation, has the leaft effect
of any of the three.

Tue country, indeed, which has not capital fufficient for all
thofe three purpofes, has not arrived at that degree of opulence
for which it feems naturally deftined. To attempt, however, pres
‘maturely. and with an infufficient capital, to do all the three, is
certainly not the fhorteft way for a fociety, no more than it would
be for an individual,.to acquire a fufficient one. The capital of

all

446 THE NATURE ANB CAUSES OF

BOOK all the individuals of a nation, has its limits in the fame manner a ‘aft
——~ that of a fingle individual, and is capable of executing only: cer- wea
tain purpofs. ‘The capital of all the individuals of a mation js tox
increafed in the fame manner as that of a fingle individyal, by their whi

continually accumulating and adding to it whatever they fave out
of their revenue. It is likely to. increafe the fafteft, therefore,
when it is employed in the way that affords: the greateft revenue
to all the inhabitants of the country, as they will thus he enabled
to make the greateft favings. But the revenue of all the inhabi-
tants of the country is neceflarily ia proportion to the value. of the
annual produce of their land and labour.

Ir has been the principal caufe of the rapid’ progrefs of our
American colonies towards wealth and greatnefs, that almoft their
whole capitals have hitherto been employed in agriculture. They
have no manufactures, thofe houfhold and coarfer manufactures
excepted which noceflarily accompany the progrefs of agriculture,
and which avethe work of the women and children in-every pri-
vate family. The greater part both of the exportation and coafting
trade of America, is.carried on by the capitals of merchants who
refide in Great Britain. Even the ftoyes.and warehowles from
which goods are retailed in fome provinces, particulanly in Vir-
ginia and Maryland, belong many of them to merchants who refide
in the mother country, and afford one of the few inftances of the
retail trade of a fociety being carried on by the capitals of thofe
who are not refident members of it. Were the Americans, either
by combination or by any other fort of violence, to ftop the im-
portation of Ewropean manufactures, and, by thus giving a mo-
nopoly to fuch of their own countrymen as could manufactare.the
like goods, divert any confiderable part af their capital into this
employment, they would retard inftead of accelerating the futher
increafe in the value of their annual produce, and would obftruét
inftead

THE WEALTH OF NATIONS,

447

inftead of promoting the :progrefs of their country towards real C HAP.
wealth and preatnels. This would be ftill more the cafe, were they C-+y—~

to attempt, inthe fame manner, to monopolize to themfelves their
whole exportation trade.

Tue courfe of human profperity, indeed, feems fcarce ever to
have been of fo long continuance.as to enable any great country
to acquire capital fufficient for all thofe three purpofes; unlefs,
perhaps,.we give credit to the wonderful accounts of the wealth
and cultivation of China, of thofe of antient Egypt, and of the
antient ftate of Indoftan. Even thofe three countries, the wealthieft,
according to all accounts, that ever were in the world, are chiefly
renowned for their fuperiority in agriculture and manufactures.
They do not appear to have been eminent for foreign trade. The
antient Egyptians had a fuperftitious antipathy to the fea; a fuper-
{tition nearly of the fame kind prevails among the Indians; and the
Chinefe have never excelled in foreign commerce. The greater part
of the furplus produce of all thofe three countries feems to have
been always exported by foreigners, who gave in exchange for it
fomething elfe for which they fouiad a demand there, frequently
gold and filver.

Ir is thus that the fame capital will in «ny country put into
motion a greater or fmaller quantity of productive labour, and
add a greater or fmaller value to the annual produce of its land and
labour, according to the different proportions in which it is em-
ployed in agriculture, manufactures, and wholefale trade. The
difference too is very great, according to the different forts of whole-
fale trade in which any part of it is employed.

Aus, wholefale trade, all buying in order to fel again by whole»
fale, may be reduced to three different forts. The home trade, the
foreign trade of confumption, and the carrying trade. The home
trade

SrtA RTE TI ee a : <

THE NATURE, AND | CAUSES OF

B oe K trade is employed in purchafing in one part of the fame country,
—v-— and felling in another, the produce of the induftry,of that country,

It comprehends both the inland and the coafting trade, The foreign
trade of confumption is employed in purchafing foreign goods for
home confumption. The carrying trade is empioyed in tranf-
acting the commerce of foreign countries, or in carrying the fur-
plus. preduce of one to another.

‘Tue capital which is employed in purchafing in one part. of
the country in order'to fell in another the produce of the. induftry
of tuat country, generally replaces by every fuch operation two
diftinét capitals that had both been employed in the agriculture or
manufactures of that country, and thereby enables them to. con-
tinue that employment. . When it fends out from the refidence of
the merchant a certain value of commedities, it generally brings
back in return at leaft an equal value of other commodities. When
both are the produce of domeftick induftry, if neceffarily replaces
by every fuch operation two diftinét capitals, which had both been
employed: in fupporting productive labour, and thereby enables
them to continue that fupport. The capital which fends Scotch
manufaétures to London, and brings back Englifh corn and
manufactures to Edinburgh, neceflarily replaces, by every fuch
operation, two Britifh capitals which had both been. employed in.
the agriculture or manufactures of Great Britain. ne

Tue capital’ employed in. purchafing foreign: goods for homer.

confumption,' when this purchafe is made with the produce. of ’

domeftick.-induftry, replaces too, by every fuch operation, two
diftinét: capitals; but-one of them only is employed in fupporting
domeftick, induftry.. The capital which fends. Britifh goods to.
Portugal; and ‘brings back. Portuguefe goods to Great Britain, 1.
places by every fuch operation only one Britifhcapital: The other

THE WEALTH OF NATIONS, f

449

is a Portuguefeé one. Though the returns, therefore, of the CHAP.
foreign trade of conlumption fhould be as quick as thofe of the an

home-trade, the capital employed in it will give but one-half the
encouragement to the induftry or productive labour of the country.

Bur the returns of the foreign trade of confumption are very
feldom fo quick as thofe of the home-trade. The returns of the
home-tvade generally come in before the end of the year, and
fometimes three or four times in the year. The returns of the
foreign trade of confumption feldom co.ne in before the end of the
yea’, and fometimes not till after two or three years. A capital,
therefore, employed in the home:trade will fometimes make twelve
operations, or be fent out and returned twelve times, before a capi-
tal employed in the foreign trade of confumption has made one,
If the capitals are equal, therefore, the one will give four and
twenty times more encouragement and fupport to the induftry
of the country than the other.

Tue foreign goods for home-confumption may fometimes be
purchafed, not with the produce of domeftick induftry, but with
fome other foreign goods, Thefe laft, however, muft have been
purchafed either immediately with the produce of domeftick
induftry, or with fomething elfe that had been purchafed with it ;
for the cafe of war and conqueft excepted, foreign goods can never
be acquired, but in exchange for fomething that had been produced
at home, either immediately, or after two or more different ex-
changes. ‘he effects, therefore, of a. capital employed in fuch
a round about foreign trade of confumption, are, in every refpect,
the fame as thofe of one employed in the moft direét trade of the
fame kind, except that the final returns are likely to be ftill more
diftant, as they muft depend upon the returns of two or three
diftinct foreign trades. If the flax and hemp of Riga are pur-
chafed with the tobacco of Virginia, which had been purchafed

Vou. I. 3M with

459

THE, NATWREO AND I CAUSES 'OFr

B wis K with Britith manufactures, the: merchant mutt, wait for the vetdrns
t—v—)_ oof two _diftinct, foreign, trades -before-he can) employ the fame cas!

pital. in, re-purchafing ;a/Jike quantity, of: (Britifh: manufactures,
If the.tobacco, of|- Virginia “had been; purchafed) not: with: Britith
manufactures, but with the fugar.and rum of Jamaica which: had
been purchafed.with thofe manufaétures, he muft: wait for the
returns. of three. If thofe two or’ three’ diftin&t foreign ‘trades
fhould happen to be ¢arried on by two or three diftinét merchants;:
of whom the fecond buys'the goods imported by the'fittt;: and the
third buys thofe imported by the fecond, inorder to export! them
again, each -merchant indeed will'in this ‘cafe receive the returns
of his own: capital ‘more quickly; ‘but the'final returns ofthe whole
capital employed in the trade'will be juft'as flow-as ever)?s Whiex

ther the. whole capital employed ‘in ‘fach’a round” about trade’

belong to one! merchant or to ‘three; can ‘make no difference with.
regard: to -the ‘country, though: it'may with ‘regard to the’ partictr=

lar merchants. Three times a greater capital ‘muft/in both cafes:

be employed, in orderto exchange'a certain value of Britiflyma+
nufaétures fora Certain’ quahtity of flax and hemp, ‘than ‘woulit

have been neceflary, had the manufactures and the flax and° hemp’

been direétly exchanged for:one another. The whole'capital’ em-'
ployed, therefore;‘in fuch a round about foreign’ trade of con

fumption, wilbgenerally give lefs ericouragement and fupport’t6 ‘the
produttive labour of ‘the country, than an equal’ capital ei int a4

in a more direct trade of the fame kind.

couragerent and fapport which it can give to the productive labour
of the country from which it 1s carried on, Ef they are pur-
chafed with the gold of Brazil, for example, or with the filver

eee

Waatkver be the foreign commodity with which the forsitia ;
goods fo; ‘home-confumptin on are purchafed, it can _gecation, na,
effential difference either in the nature of the trade, or in.the en- 4

THE TWRALTH! OF NATIONS

4st

of Pevu,» this gold arid: filvers like’ thé’ tobacco’ of: Virginia, mutt CH ie P,
have beet purchafed-withy fomething ‘that ‘either was ‘the produce men?

of thé sinduftry: ‘of! ‘the!ocountry,'' or ‘that ® had! been *purchaféd
with: ‘fomething™ elfe)! that was fo. So ' far, therefore; ‘as the
productive labour! of the: country is’ concerned, the foreign
trddeof confunyption’ which ‘is ¢arried on by means of ' gold and
filver;; hass.all the:!\advantages’ and’ all the inconveniencies of
any otherequally round :about foreign trade of confumption,
and will replace juft: ds»:faft:or: juft as flow the capital’ which is

immediately: employed ::in. fupporting that productive labour. It

feems: even’: to: have -one ‘advantage over any other equally round
about, foreign trade. |The! tranfportation of thofe metals from
ong! \place to. another, on:account of their:fmall bulk and great
value, is;lefs expenfive- than \that ofalmoft any other foreign goods
of;equal,value. Their freight>is,‘much lefs; and* their infurance

not-greater.. An equal quantity of foreign goods, therefore, may.

frequentlybe purchafed with a-{maller quantity of the produce
of ,domeftick induftry, by the:intervention of gold and filver, than

byi that of any other foreign goods. The demand of the country”
may-frequently, in-this manner, be fupplied more compleatly and‘
ata fmaller expence than in any other. Whether, by the con-'

tinual ‘exportation of thofe metals, a trade of this kind is likely
to, ,impoverifh the country from which it is carried on, in any
other, way,' I fhall have occafion to examine at great length here-
after.

TuatT part of the capital of any country which is employed in
the carrying trade, is altogether withdrawn from fupporting the

productive labour of that particular country, to fupport that of

fome foreign countries. Though it may replace Sy every operation
two diftmé& capitals, yet neither of them belong to that particular
country. The capital of the Dutch merchant, which carries the
corm n of Poland to’ Portugal, and brings back the fruits and wines
3Ma2 of

454 THE ONA TURE CANDY CAUSES: OF

BO.G:% of Portugal.te Poland, replaces by:every:fisch oparation two gapitalsy

ew, neither of whichhad, been: employed, in, {upporting the productive,
labour.of Holland, but, one.of them, im fupporting that. of Polands
and. the other. that of Portugal... The. profits only return regularly,
to. Holland, . and,, conftitute. the. whole/ addition. which. this , trade,
neceflarily, makes to, the annual produce.of the land and labour of
that country. When, indeed, the carrying trade of any. particular
country. is carried, on with the thips and failors of that. country, that,
part of the capital employed. in, it which pays the, freight, is, di.
ftributed, among, and. puts. into. motion a certain, number, of. pray
ductive labourers. of. that. country... Almoft all. nations that, have.
had _ any, confiderable fhare of, the, carrying tvadq. have, in, fact,,
carried it on in this manner. The trade. idelf, has, probably. de-
rived its name from, it, the. people, of fuch. cquntries, being. the
carriers to other countries, It does, not, however, feem,
to the nature of, the trade, that it thould, be fo... A. Dutch; merchant,
may, for example, employ his capital i in tranfacting the commerce,
of Poland and Portugal, _ by carrying, part of the furplus. produce;
of the one to the other, not in. Dutch, but in, Britith. bottomy..,
It, may be prefumed, that he actually docs fo upon. fome. particular,
occafions. It is upon this, account, however,, that, the, carrying;
trade has been fuppofed peculiarly advantageous.to fuch, a, country,
as Great Britain, of which the defence. and.fecurity depend. upon:
the number of its failors. and fhipping. But. the fame.capital, may.
employ as many failors and fhipping, either in the foreign trade:
of confumption, or even in. the home-trade,. when. carried. on. by.
coafting veffels,- as: it could’ in. the carrying trade. The number,
of failors and'{hipping which. any particular capital “can employ, .
does not depénd’ upon. the nature-of the trade, but partly upon.
the bulk of the. goods in proportion. to their: value, and’ partly:
upon the-diftance of the ports between which they. are to be -car-
ried ; chiefly upon: the former of thofétwo circumftances. The:
coal-trade. from.Newcaftle <o.London, for example, employs more

fhipping |

THE WHRALTH SOF (NATIONS 447

Dipping than all the:carrying trade! of Bugland; ‘though ene parte CHAP!
arc atono great diftance, To fore; therefore, ‘by éxtraordiilary oH.
encouragements, a larger’ fhare' of the capital of any country into’

the carrying trade, than what would:naturally go to’it, will not

ovat iarevay: increafe the fhipping of that country.

‘Pie capital, therefore; empfoyed'in the ile ot elif sonst
will'generally give encouragement and fupport to a greater quaniity
of produétive labour in'that country, and increafé the value of its
anifitial produce more than an ‘equaf capital ‘employed in the foreign.
trade of confumption: and the capital employed in this latter trade
has‘in'both thefé refpects a ftill greater advantage over an equal
capital employed'in'the carrying trade. The riches, and, fo far as
power depends upon: riches,. the power of every country, muft al-
ways' bein’ proportion to the value of its annual produce, the fund
from which all taxes muft: ultimately be paid. But the great object
of the: political’ economy of every country, is to encreafe the
riches and’ power of that country, It ought, therefore, to give no
preference nor‘ fuperior’ encouragement’ to the foreign trade of
conflimption: ‘above ‘the home-trade, nor ‘to the carrying trade
above either of the other two: It ought neither to force nor to
alltite into’ either of thofe two channels, a greater fhare of the :ca--
pital'of the. country, than what would ‘naturally flow into them of.
” own’ iecoeisig

“Bacn of thofe different branches of. trade, however, is, not
only. advantageous, but neceffary and unavoidable, ,. when: the.

oourle: of things without any conftraint, or. violence pesorally in-
trodtices, it.

Wuewn the produce of any, particular braneh:of: Snduftiy encebis
what the. demand ..of the, country, requires, the: ‘furplus mutt. be’
fent

454,

THEO NATURE AND CAUSES! OF

BOOK fent abroad,,,and-.exchanged. for fomething - for: whiohothére idia:

Ih,

demand, at, home.,,. Without fuch exportation, a parti of the:pros:
ductive labour of, the country muft, ceafe, and:the value ofits ax‘ nab
produce diminifh, The land and labour of Great Britain yoruce
generally more corn, woollens, and hard ware, than.the demand
of the home-market requires. The furplus part. of them, there-
fore, muft be fent abroad, and exchanged for fomething for which
there is a demand. at, home.,.. It.is, only by means of, fuch, exp,
portation, that this, furplus. can, acquire a value fufficient, to,
compenfate the labour and expence of prodycing it. The neigh:
bourhood of the fea-coaft, and the banks of all navigable rivers,
are advantageous fituations for induftry, only becaule they, facilitate
the exportation and exchange of fuch. furplus produce for fome-
thing elfe which is more in demand there.

+
vik

Wuen the foreign goods which are thus purchatfed with the; fure;

plus produce of domeftick induftry exceed the demand of the home-,,

market, the furplus part, of them muft be fent abroad, again,
and_ exchanged for foructhing, more. in demand at, home..;, About,

ninety-fix thoufand hogthpads ‘of ,tabacco, are annually, purchafed ,

in, Virginia and Maryland, with a part, of the furplyus, produce,
of Britith induftry. But the demand of Great Britain, does, not,

require, perhaps, more than fourteen thoufand, , If the xemaining-

eighty-two thoufand, therefore, could not be fent abroad and ex-,
changed for fomething more in demand at home, the importation
of them muft ceafe immediately, and. with it the productive labour
of all thofe inhgbjtants of Great Britain, who are at prefent em;

ployed i in preparing the goods with which thefe eighty;two thous...

fand hogtheads are annually purchafed. Thofe goods, which are
part of the produce of the land and labour of Great Britain, having
no market at home, and being deprived of that which, they had

abroad, muft ceafe to be produced. The moft round about foreign, .

7 trade

caufe
it W
effedl
thee
the’
of » tl

THE’ WRAL THAOFNAMONS:,

trade of confumption, ‘therefore, may, upon fore occafions, ‘be
asneceflary for fupporting the produétive labour of the cong yr
and: the value oi its: annual pene as my drneas direct. A ed fe

“wien dawinicnane ftock’of any country is-inereafed to fuch @

degree, that it cannot be all employed in fupplying the confump-;

tion, and fupporting the produétive Jabour’of that particular-coun-
try, the furplus part of it naturally difvorges itfelf into the carrying
trade,’ ‘and'is: employed’ in perfor the’ fame offices to other
countries.” ‘The’ carrying trade . 1 effect and fymptom

of great national wealth: but it d m to be the natural.

caufe of it. Thofe ftatefmen who have been difpofed to favour
it With particular encouragements, feem.to have miftaken the
effect and fymptom for the caufe. Holland, in proportion to
the extent of the land and the number of its inhabitants, by far
the'richeft ‘country in Europe, has, accordingly,‘ the.greateft fhare
of the carrying trade of Europe. England, perhaps the fecond
richeft: country of Europe,’ is likewife fuppofed to have a con-
fidefable fhare'of it; though what commonly paffes for the carrying,

trade of ‘England, will. frequently, perhaps, be found to be no:

more. than-a round about foreign trade of confumption. Such:
are, in “a great meafure, the trades which carry the goods of the
Eaft and’ Weft Indies, and of ‘America, to different European
markets. Tho! goods are generally purchafed either immediately
with the produce of Britifh induftry, or with fomething elfe which

had ‘been purchafed with that produce, and the final returns of |

thofé'trades ‘are generally ufed or confumed in Great Britain. The
trade Which ‘is. carried on’ in Britifh bottoms between: the' different

ports of the Mediterranean, and fome trade of the fame kind car-’

ried on’ by. Britifh merchants between the different ports of India,.
make, perhaps, the principal branches of what is properly the.
carrying trade of Great Britain.,.

Tue.

455°
CHAP.
y

%
Vv

lee

125

Aa
0°
=
<=
=
a
qu
>2
w =
Oo”
3 =
Su
=

456 THE NATURE AND CAUSES OF

ROOK ‘Tux extent of the home-trade and of the capital which can be

tesxee! employed in it, is neceflarily limited by the value of the forplue
produce of afl thofe diftant places within the country which hive
occafion to exchange their refpective productions with one another,
‘That of the foreign trade.of confumption, by the value of the fur-
plus produce of the whole country and of what can be purchafed
with it. That of the carrying trade, by the value of the furplus
produce of all the different countries in the world. Its poffible
extent, therefore, is in a manner infinite in comparifon of that
of the other two, and is capable of abforbing the greateft caw
Pitals. |

Tue confideration of his own private profit, is the fole motive
which determines the owner of any capital to employ it either in
agriculture, in manufactures, or in fome particular branch of the
wholefale or retail trade. ‘The different quantities of pfoduétive’
labour which it may put into motion, and the different values which
it may add to the annual produce-of the land and labour of the
fociety, according as it is employed in one or other of thofe dif-
ferent ways, never enter into his thoughts. In countries, thete-
fore, where agriculture is the moft profitable:of all employments,
and farming and improving the moft direst roads to a fplendid
fortune, the capitals of individuals will naturally be employed in
the manner moft advantageous to the whole fociety. The profits
of agriculture, however, feem to have ho fuperiority over thofe of
other employments in any part of Europe. Projeétors, indeed,
in every corner of it, have within thefe few years amufed the pub-
lick with moft magnificent accounts of the profits to be made by
the cultivation and improvement of land. Without entering into
any particular difcuffion of their calculations, a very fimple ob-
fervation may fatisfy us that the refult of them mauft be falfe. We
fee every day the moft fplencid fortunes that have been acquired

4 mn

7 SS er Sa ae > Gee Sean

dec,

+ Sey fee *

THE ‘WEALTH OF' NATIONS.

497

sin:the toutte of'a’fingle lifelby tride and mandfattutes; *frequéntly CHA.
‘fram avery {mall capital, fometimes ‘from no capital. “A fingle C+~—~

-inftance!of ;fuch a ‘fortune’ acquired by agriculture ‘in’ the’ fame
tivheyandoftom fucli’\a capital, had’ ‘not,’ perhaps, dccurred in
Bitrope ‘during the courfe of ithe 'prefent ceritury:’! In all the’ great
countries of Europe, however, much good’ land ftill remains un-
ecultivated, and 'the® greater part of what is cultivated is far from
being improved to the degree of' which ‘it is capable. Agriculture,
itherefore, \isalmoft: everywhere capable of abforbing a much
-greater.capital: than! has ever yet been employed in it. ‘What cir-
cumftances in the policy of Europe have given the trades which
are carried on in towns fo great an advantage over that which is
.Sanzied.on .in the country, , that; private :perfons frequently find
it gore for.their, advantage to, employ: their capitals in the moft
-dutent carrying trades of .Afia and) America,' than in the improve-
-mentiand cultivation of the moft fertile fields in their own neigh-
boushood, I. fhall endeavour to age at, full: length in the two
eclipdivene books,

- eis
-tib Pk

( 439 )

B 0 O K HII.

OF the different Psp af Opulence in different
. Nations.

CH AP! ook.
Of ‘the natural Progrefs of Opulence.

HE great commerce of every civilized ‘fociety, is that carried

on between the inhabitants of the town and thofe of the
country. It confifts in the exchange of rude for manufactured pro-
duce, either immediately, or by the intervention of money, or of
fome fort of paper which reprefents money. The country fupplies
the town with the means of fubfiftence, and the materials of ma-
nufaéture. The town repays this fupply by fending back a part
of the manufactured produce to the inhabitants of the country.
The town, in which there neither is nor can be any reproduction
of fubftances, may very properly be faid to gain its whole wealth
and fubfiftence from the country. We muft not, however, upon
this account, imagine that the gain of the town is the lofs of the
country. The gains of both are mutual and reciprocal, and the
divifion of labour is in this, as in all other cafes, advantageous to
all the different perfons employed in the various occupations into
which it:ts fubdivided. The inhabitants of the country purchafe of
the town a gteatér quantity of manufactured goods, with the pro-
duce of a much fmaller quantity of their own labour, than they
mutt have ‘employed had they attempted to prepare them themfelves,
The town affords a market for the furplus produce of the country,

3N2 or

CHAP.

460

THE NATURE AND CAUSES OF

B o8 K or.what is over and above the maintenance of the cultivators, and:
———_ it is there that the inhabitants of the country exchange it for fome-

thing elfe which isin demand among them, The greater the num-
ber and revenue of the inhabitants of the town, the more extenfive
is the market which it affords to thofe of the country; and the more
extenfive that market, it is always the more advantageous to a great
number. The corn which grows within a mile of the town, {fells
there for the fame price with that which comes from twenty miles
diftance. But the price of the latter muft generally, not only pay
the expence of raifing and bringing it to market, but afford too.
the ordinary profits of agriculture to the farmer. The proprietors:
and cultivators of the country, therefore, which lies in the
neighbourhood of the town, over and above the. ordinary profits.
of agriculture, gain, in the price of what they fell, the whole value
of the carriage of the like produce that is brought from more diftant:
parts, and they fave, befides, the whole value of this carriage in
the price of what they buy. Compare the cultivation of the lands
in the neighbourhood of any confiderable town,. with that of thofe
which lie at-fome diftance from: it, and yau. will eafily fatisfy
yourfelf how much the country is benefited by the commerce of the
town. Among all the abfurd fpeculations that have been pro-
pagated. concerning the. balance: of trade, it has never heen pretended.
that either the country lofes by its commerce with the town,..or,
the town by. that with the country which maintains it.

As fubfiftence is, in the. nature.of things, prior to conveniency, .
and luxury, fo the induftry which procures the former, muft
neceflarily be prior to that which minifters to. the latter. The
cultivation and. improvement of the country, therefore, -which.
affords fubfiftence, muft, neceffarily, be prior. to the increafe of
the town, which furni{hes only the means of conveniency and luxury.
It is the furplus produce of the country only, or what is- over and.

abave

THE WEALTH OF NATIONS,

461

above the maintenance of the cultivators, that conftitutes the fubfift- C HA P.
ence of the town, which can therefore increafe only with the increafe —+—~

of this furplus produce. The town, indeed, may not always derive
its whole fubfiftence from the country in its neighbourhood, or even
from the territory to which it belongs, but from very diftant coun-
tries; and this, though it forms no exception from the general
rule, has occafioned confiderable variations in the progrefs of
opulence in. different ages and nations.

Twat order of things which neceffity impofes in general, though
not in every particular country, is, in every particular country,
promoted by the natural inclinations of man. If human inftitu-
tions had never thwarted thofe natural inclinations, the towns
could no where have increafed beyond what the improvement and
cultivation of ‘the territory in which they were fituated could fup-
port; till fuch time, at leaft, as the whole of that territory was
completely cultivated and improved. Upon equal, or nearly equal
profits, moft men will chufe to employ their capitals rather in the
improvement and cultivation of land, than either in manufactures
or in foreign trade. The man who employs his capital in land,.
has it more under his view and command, and his fortune is much.
lefs liable to accidents than that of the trader, who is obliged fre--
quently to commit it, not only to the winds and the waves, but:
to the more uncertain elements of human folly and injuftice, by:
giving great credits in diftant countries to men, with whofe cha-
racter and fituation he can feldom be. thoroughly acquainted..
The capital of the landlord, on the contrary, which is fixed in the:
improvement of his land, feems to be as well fecured as the nature
of human affairs can, admit. of. The beauty of the country befides,
the pleafures of a country, life, the tranquillity of mind which it
promifes, and wherever the injuftice of human laws does not:
difturb it, the independency which it.really affords, have charms:

that:

462 THE NATURE AND CAUSES OF

BOOK that more or lefs attract every body 5 and’as'to cultivate the ground
ginotiy was the original deftination of man, fo in every ftage of his
exiftence he feems to retain a predilection for this primitive
employment.

Wirnovrt the affiftance of fome artificers, indeed, the cul-
tivation of land cannot be carried on, but with great incon-
veniency and continual interruption. Smiths, carpenters, wheel~
wrights, and plough-wrights, mafons, and bricklayers, tanners,
fhoemakers, and taylors, are people, whole fervice the farmer
has frequent occafion for. Such artificers too ftand, occafionally,
in need of the affiftance of one another; and as their refidence is
not, like that of the farmer, neceffarily ticd down ‘to a precife
fpot, they naturally fettle in the neighbourhood of one another,
and thus form a fall town or village. The butcher, the brewer,
and the baker, foon join them, together with many other artificers
and retailers, necefflary or ufeful for fupplying their occafional
wants, and who contribute ftill further to augment the town.
The inhabitants of the town and thofe of the country are,

mutually, the fervants of one another. The town is a continual ”
fair or market, to which the inhabitants of the country refort

in order to exchange their rude for manufatured produce. It é
1g this commerce which fupplics the inhabitants of the town both eu
with the materials of their work, and the means of their fubfittence. ar
The quantity of the finifhed work which they fell to the in- oc
habitants of the country, neceffarily regulates the quantity of the wi
materials and provifions which they buy. Neither their employ- irc
ment nor fubfiftence, therefore, can augment, but in proportion to Ft
the augmentation of the demand from the country for finifhed gr
work ; and this “demand can augment only in proportion to the gt
extenfion of improvement and cultivation. Had human inftitue. it

tions, therefore, never difturbed the natural courfe of things, the
: 7 progreflive

THE WEALTH OF NATIONS,

463

progreffive wealth and increafe of the towns would, in every CHAP.
political fociety, be confequential, and in proportion to the im=- ==

provement and cultivation of the territory or country.

In our North American colonies, where uncultivated land
ig {till to:'be had upon eafy terms, no manufactures for diftant fale
have ever yet been eftablifhed in any of their towns. When an
artificer has acquired a little more ftock than is neceflary for
carrying on his own bufinefs in fupplying the neighbouring country,
he does. not, in North America, attempt to eftablifh with it a
manufacture for more diftant fale, but employs it in the purchafe:
and improvement of uncultivated land. From artificer he be-
comes: planter, and neither the large wages nor the eafy fubfiftence
which that country affords to artificers, can bribe him rather to work
for other people than for himfelf.. He fecls that an: artificer is the
fervant of his cuftomers, from whom. he derives his fubfiftence; but
that.a planter who cultivates his own land, and derives his neceffary,
fubfiftence from the labour of his own. family, is really. a. mafter,
and independent of all the world..

In‘ countries; on the contrary, where there is either no: une
cultivated land, or none that can be had upon eafy terms, every

artificer who: has: acquired’ more ftwck than he can employ in the:

occafional jobs of the neighbu: ood, endeavours to prepare
work for more diftant fale. The fmith erects fome fort of
iron, the weaver fome fort of linen or woollen manufactory,.
Thofe: different manufactures come, in’ proeefs of time, to be

gradually fubdivided, and thereby improved and refined in a:
great variety of ways, which may eafily be conceived,. and which:

it. is therefore unneceflary. to:explain any further.

In:

464
BOOE

Il.
mn aie

THE NATURE AND CAUSES OF

In fecking for employment to a capital, manufactures are, upon
equal or nearly equal profits, naturally preferred to foreign
commerce, for the fame reafon that agriculture is naturally
preferred to manufactures, As the capital of the landlord
or farmer is more fecure than that of the manufacturer, fo
the capital of the manufacturer, being at all times more within
his view and command, is more fecure than that of the foreign
merchant. In every period, indeed, of every fociety, the furplus
part both of the rude and manufactured produce, or that for which
there is no demand at home, muft be fent abroad in order to
be exchanged for fomething for which there is fome demand
at home. But whether the capital, which carries this furplus
produce abroad, be a foreign or a domeftick one, is of very:
little importance. If the fociety has not acquired fufficient capitay
both to cultivate all its lands, and to manufacture in the com-
pleateft manner the whole of their rude produce, there is even
a confiderable advantage that it fhould be exported by a foreign
capital, in order that the whole ftock of the fociety may be
employed in more ufeful purpofes. The wealth of ancient Egypt,
that of China and Indoftan, fufficiently demonftrate that a
nation may attain a very high degree of opulence, though
the greater part of its exportation trade be carried on by
foreigners. The progrefs of our North American and Weft
Indian colonies would have been much lefs rapid, had no capital
but what belonged to themfelves been employed in exporting their
furplus produce. :

Accorp1NG to the natural courfe of things, therefore, the
greater part of the capital of every growing fociety is, firft,
directed to agriculture, afterwards to manufactures, and _laft
of all to foreign commerce. This order of things is fo very..
natural, that in every fociety that had any territory, it has

always,

THE WEALTH OF NATIONS.

455

always, I believe, been in fome degree obferved, Some of their C HAP
lands muft have been cultivated before any confiderable towns w+—

could be eftablifhed, and fome fort of coarfe induftry of the
manufacturing kind muft have been carried on in thofe towns,
before they could well think of employing themfelves in foreign
commerce.

Bur though this natural otder of things muft have taken place
in fome degree in every fuch fociety, it has, in all the modern
ftates of Europe, been, in many refpects, intirely inverted.
The foreign commerce of fome of their cities has introduced all
their finer manufactures, or fuch as were fit for diftant fale;
and manufactures and foreign commerce together, have given
birth to the principal improvements of agriculture. The manners
and cuftoms which the nature of their original government in-
troduced, and which remained after that government was greatly
altered, neceffarily forced them into this unnatural and retro-
grade order,

THE NATURE AND CAUSES OF

CHAP. II.

Of the Difcouragement of Agriculture in the antient State of Europe
after the Fall of the Roman Erbire.

BOOK HEN the German and Scythian nations over-ran the
settee weftern provinces of the Roman empire, the confufions

which followed fo great a revolution lafted for feveral centuries,
The rapine and violence which the barbarians exercifed againft
the antient inhabitants, interrupted the commerce between the
towns and the country. The towns were deferted, and the country
was left uncultivated, and the weftern provinces of Europe, which
had enjoyed a confiderable degree of opulence under the Roman
empire, funk into the loweft ftate of poverty and barbarifm.
During the continuance of thofe confufions, the chiefs and princi-
pal leaders of thofe nations, acquired or ufurped to themfelves the
greater part of the lands of thofe countries. A great part of
them was uncultivated; but no part of them, whether cultivated
or uncultivated, was left without a proprietor. All of them were
engroffed, and the greater part by a few great proprietors.

Turis original engroffing of uncultivated lands, though a great,
might have been but a tranfitory evil. They might foon have
been divided again, and broke into fmall parcels either by fuc-
ceffion or by alienation. The law of primogeniture hindered them
from being divided by fucceffion: the introduction of entails pre~
vented their being broke into fmall parcels by alienation,

Wuen land, like moveables, is confidered as the means. only
of fubfiftence and enjoyment, the natural law of fucceffion divides

it,

THE WEALTH OF NATIONS,

467

it, like them, among all the children of the family; of all of CHAP.
whom the fubfiftence and enjoyment may be fuppofed equally dear U-+—

to the father. This natura! law of fucceffion accordingly took place
among the Romans, who made no more diftinétion between elder
and younger, between male and female, in the inheritance of
lands, than we do in the diftribution of moveables. But when land
was confidered as the means, . not, of .fubfiftence merely, but of
power and protection, it was thought better that it fhould defcend
undivided to one. In thofe diforderly times, every great landlord
was a fort of petty prince. His tenants were his fubjects. He
was their judge, and in fome refpeéts their legiflator in peace, and
their leader in war. He made war according to his own difcretion,
frequently againft his neighbours, and fometimes againft his fove-
reign. The fecurity of a landed eftate, therefore, the protection
which its owner could afford to thofe who dwelt on it, depended
upon its greatnefs, To divide it was to ruin it, and to expofe every
part of it to be opprefied and fwallowed up by the incurfions of
its neighbours, The law of primogeniture, therefore, came to
take place, not immediately, indeed, but in procefs of time, in
the fucceffion of landed eftates, for the fame reafon that it has
generally taken place in that of monarchies, though not always at
their firft inftitution. That the power, and confequently the fecu-
rity of the monarchy, may not be weakened by divifion, it muft
defcend entire to one of the children. To which of them fo im-
portant a preference fhall be given, muft be determined by fome
general rule, founded not upon the doubtful diftinétions of per-
fonal merit, but upon fome plain and evident difference which can
admit of no difpute. Among the children of the fame family,
there can be no indifputable difference but that of fex, and that
of age. The male fex is univerfally preferred to the female; and
when all other things are equal, the elder every where takes place
302 of

468

BOOK of the younger. Hence the origin of the right of primogeniture,
team and of what is called lineal fucceffion,

THE NATURE AND CAUSES OF

Laws frequently continue in force long after the circumftances,
which firft gave occafion to them, and which could alone render
them reafonable, are no more. In the prefent ftate of Europe,
the proprietor of a fingle acre of land is as perfeétly fecure of his
poffeffion as the proprietor of a hundred thoufand. The right of
primogeniture, however, ftill continues to be refpected, and as
of all inftitutions it is the fitteft to fupport the pride of family
diftinétions, it is {till likely to endure for many centuries. In
every other refpect, nothing can be more contrary to the real in-
tereft of a numerous family, than a right which, in order to enrich
one, beggars all the reft of the children.

ENTAILs are the natural confequences of the law of primo-
geniture. They were introduced to preferve a certain lineal fuc-
ceffion, of which the law of primogeniture firft gave the idea,
and to hinder any. part of the original eftate from being carried out
of the propofed line either by gift, or devife, or alienation; either
by the folly, or by the misfortune of any of its fucceffive owners,
They were altogether unknown to the Romans. Neither their
fubftitutions nor fideicommiffes bear any refemblance to entails,
though fome French lawyers have thought proper to drefs the
modern inftitution in the language and form of thofe antient
ones.

Wuen great landed eftates were a fort of principalities; entails
might not be unreafonable. Like what are called the fundamental
laws of fome monarchies, they might frequently hinder the fecurity
of thoufands from being endangered by the caprice or extravagance
Of one man. But in the prefent ftate of Europe, when fimall as”

7 well

THE WEALTH OF NATIONS,

469

well as great eftates derive their fecurity from the laws of their CH AP,
country, nothing can be more compleatly abfurd. They are w+y—w

founded ‘upon the moft abfurd of all fuppofitions, the fuppofition
that every fucceffive generation of men have not an equal right

to the earth, and to all that it poffeffes; but fhat the property of

the prefent generation fhould be reftrained and regulated according
to the fancy. of thofe who died perhaps five hundred years ago.
Entails, however, are ftill refpected through the greater part of
Europe, in thofe countries particularly in which noble birth is
a neceflary qualification for the enjoyment either of civil or military
honours. Entails are thought neceflary for maintaining this ex-

clufive privilege of the nobility to the great offices and honours:

of their country; and that order having ufurped one unjuft ad-
vantage over the reft of their fellow citizens, left their poverty
fhould render it ridiculous, it is thought reafonable that they fhould
have another. The common law of England, indeed, is faid to
abhor perpetuities, and they are accordingly more reftricted there
than in any other European monarchy ;. though even England is

not altogether without them. In Scotland more than one-fifth,.
perhaps more than one-third part of the whole lands of the country,.

are at prefent under ftrict entail.

~ Great tracts of uncultivated land were, in. this manner, not:

only engroffed by particular families, but the poffibility of their
being divided again was as much as poffible precluded forever.
It feldom happens, however, that a great proprietor is a great
improver. In the diforderly times which gave birth to thofe bar-
barous inftitutions, the great proprietor was fufficiently employed
in defending his own territories, or in extending his jurifdiction
and authority over thofe of his neighbours.. He had no leifure to

attend to the cultivation and’ improvement of land. When the.

eftablifhment of law and order affoided him this leifure, he often.

wanted the inclination, and almoft always the requifite abilities... If.
the.

479

THE NATURE’AND->: CAUSES -OF

ae K the expence of his houfe and perfon either equalled or exceeded
—— his revenue, as it did very frequently, he had no ftock to

employ in this manner. If he was an ceconomift, he generally
found it more profitable to employ his annual favings in’ new
purchafes, than in the improvement of his old eftate. To im-
prove land with profit, like all other commercial projects, re-
quires an exact attention to fmall favings and fmall gains, of which
a man born toa great fortune, even though naturally frugal, is
very feldom capable. The fituation of fuch a perfon naturally
difpofes him to attend rather to ornament which pleafes his fancy,
than to profit for which he has fo little occafion. The elegance of
his drefs, of his equipage, of his houfe, and houfhold furniture,
are objects which from his infancy he has been accuftomed to have
fome anxiety about. The turn of mind which this habit natu-
rally forms, follows him when he comes to think of the improve-
ment of land. He embellifhes perhaps four or‘five hundred acres
in the neighbourhood of his houfe, at ten times the expence which
the land is worth after all. his improvements; and finds that if
he was to improve his whole eftate in the fame manner, and he
has little tafte for any other, he would be a bankrupt before he
had finifhed the tenth part of it. ‘There ftill remain in both parts
of the united kingdom fome great eftates which have continued
without interruption in the hands of the fame family fince the
times of feudal anarchy. Compare the prefent condition of thofe
eftates with the poffeffions of the fmall proprietors in their neigh-
bourhood, and you will require no other argument to convince
you how unfavourable fuch extenfive property is to improve-
ment.

Ir little improvement was to be expected from fuch great pro-
prietors, ftill lefs was to be hoped for from thofe who occupied
the land under them. In the antient ftate of Europe, the occupiers

of land were all tenants at will. They were all or almoft all flaves;’

but

s i i een Pn kaa a eet we es

“RHE WEALTH OF NATIONS,

ert

Yut their flavery was of a milder kind than that known among CHA P.
the antient Greeks and Romans, or even in our Weft Indian colo- --+s—y

nies.. They were fuppofed to belong more directly to the land
than to their mafter. They.could, therefore, be fold with it,
but not feparately. They could marry, provided it was with the
confent of their mafter; and he could not afterwards diffolve the
marriage | by felling the man and wife to different perfons. If he
maimed or murdered any of them, he was liable to fome penalty,
‘though generally but toa fmall one. They were not, however,
capable of acquiring property. Whatever they acquired was ac-
quired to their mafter, and he could take it from them at pleafure.
Whatever cultivation and improvement could be carried on by means
of fuch flaves, was properly carried on by their mafter. It was
at‘his expence; ‘The feed, the cattle; and the inftruments of
hufbandry were all his. It.was for his benefit. Such flaves could
acquire nothing but their daily maintenance. It was properly the
proprietor himfelf,’ therefore; that, in this cafe, occupied his own
lands, and cultivated them by his own bondmen. This fpecies of
flavery till fubfifts in Ruffia, Poland, Hungary; Bohemia, Mo-
ravia, and other parts of Germany. It is only in the weftern and
fouth-weftern provinces of Eurepe, that it has grataany been
abolifhed altogether.

Bur if great improvements are feldom to be expected from
great proprietors, they are leaft of all to be expeéted when they
employ flaves for their wo:xmen. The experience of all ages and
nations, 1 believe, demonftrates that the work done by flaves,
though it appears to coft only their maintenance, is. in the end the
deareft of any. A perfon who can acquire no property, can have
no other intereft but to eat as much, and to labour as little as pof-
fible. Whatever work he does beyond what is fufficient to pur-
chafe his own maintenance, can be fqueezed out of him by vio-
_Ienceonly, and not by any intereft of his own. In antient Italy,
_ Vou. I. 3 O¢, how

472

THE NATURE AND CAUSES OF

BOOK how much the cultivation of corn degenerated, how unprofitable
ices it became to the mafter when it fell undet the management of

flaves, is remarked by both Pliny and Columella. In the time
of Ariftotle it had not been much better in antient Greece. Speak-
ing of the ideal republic defcribed in the laws of Plato, to main-
tain five thoufand idle men (the number of warriors fuppofed
neceflary for its defence) together with their women and fervants,
would require, he fays, @ territory of boundlefs extent and fertility,
like the plains of Babylon.

Tue pride of man makes him love to domineer, and nothing
mortifies him fo much as to be obliged to condefcend to perfuade his
inferiors. Wherever the law allows it, and the nature of the work
can afford it, therefare, he will generally prefer the fervice of flaves
to that of freemen. The planting of fugar and tebacco can afford
the expence of flave-cultivation. The railing of corn, it Seems,
in the prefent times, cannot. In the Englith colonies, of which
the principal produce: is corn, the far greater part of the work is
done by freemen. The jate: refolution of the quakers in Penfyl-
vania to fet at liberty all their negroe flaves, may fatisfy us that
theiy number cannot be very great. Had they made any confiderable
part of their property, fuch a refolution could never have been
agreed to. In our fugar colonies, on the contrary, the whole work
is dene by flaves, and in our tobacco colonies a very great part of
it. The profits of a fugar-plantation in any of our Weft Indian
colonies are generally much greater than thofe af any other cul-
tivation that is knowaeither in Europe or America: And the profits
of a tobacco plantation, though inferior to thofe of fugar, are
fuperior to thofe ef cora, es has already bean obferved. Both can
afford the expence of flave-cultivation, but fagar can afford it till
better then tobance. The number of negroes accordingly is much
greater, in proportion to that of whites, in our fugar than in our
tebacce colenics.

¢ To

THE -WEALTH OF NATIONS,

473

. To the flave cultivators of antient times, gradually fucceeded © HA P,
a fpecies of farmers known at prefent in France by the name of G+-ay

Metayers. They are,called in Latin Coloni Partiarii. They have
been fo long in difufein England that at prefent I know no Englifh
name for them. The proprietor furnifhed them with the feed,
cattle, and inftruments of hufbandry, the whole ftock, in fhort,
neceflary. for cultivating the farm. The produce was divided
equally between the proprietor and the farmer, after fetting afide
what-was judged neceflary for keeping up the ftock, which was re-
ftored to the proprietor when the farmer either quitted or was
‘ turned out of the farm. .

LAnp occupied by fuch tenants is’ properly cultivated at the
éxpence of the proprietor, as much as that occupied’ by flaves,
There is, however, one very’ effential- ‘difference between them.
Such tenants, being freemen, are capable of acquiring property,
and having a certain proportion of the produce of the land, they
have a plain intereft that the whole produce fhould be'as great as
poffible, in order that their‘own proportion may be:fo. A flave,
on the contrary,: who can acquire nothing but his maintenance,
confults his own eafe by making the land produce-as little as pof-
‘fible, over and above that maintenance. It is probable that it was
partly upon account of this advantage, and partly upon account
of the encroachments which the fovereign, always jealous of the
‘great lords, gradually encouraged their villains to’ make upon their
authority, and which feem at laft to have been fuch as rendered
this fpecies of fervitude altogether inconvenient, that tenure in
villanage gradually wore out through the greater part of Europe.
‘The time and manner, however, in which fo important a revo-
‘lution was brought about, is one of the moft obfcure points in
modern hiftory. The:church of Rome claims great merit in it;
and it is certain that fo early as the twelfth century, Alexander III.

Vou. I. : 3 P publifhed

. nwnapeabvevanaseneereeaeinertiienAneeasaR atte ter

474

THE NATURE AND CAUSES OF

B 90 K publifhed a bull for the general emancipation of flaves. It feems,
iw however’, to have been rather a pious éxhortation, than a law to

which exact obedience was required from the faithful. Slavery
continued to take place almoft univerfally for feveral centuries afters
wards, till it was gradually abolifhed ‘by the joint operation of the
two interefts above mentioned, that'of the proptictor on the ‘one
hand, atid that ‘of the fovereign on the other. A villain enfrana
chifed, and at ‘the fame time allowed to contifme in poffeffion of
the land, ‘having no ftock of his own, could cultivate it only by
means of what the landlord advanced to him, and muft, therefore,
have been what the French call a Metayer.

Ir could néver, however, be the intereft even of this laft fpecies.
of ‘cultivators 'tolay out in the further improvement of the land,
any part of ‘the little ftock which they might fave from their own
fare of the produce, becaufe the lord, who laid out nothing, was
to get one-half of whatever it produced. The tithe, which is but
a tenth of the produce, is found to bea very great hinderance to
improvement. A tax, therefore, which amounted to one half,
muft have been an effectual bar to it. It might be the intereft of
a metayer to:make the land. produce as much as could be brought
out of it by means of the ftock furnifhed by the proprietor: but
it could never be his intereft to mix any part of his own with
it. In France, where’five parts out of fix of the whole kingdom.
are faid to be ftill occupied by this fpecies of cultivators, the pro-
prietors complain that their metayers take every opportunity of
employing the mafters cattle rather in carriage than in cultivation ;
becaufe in the one cafe they get the whole profits to themfelves, in
the other they fhare them with their landlord. ‘This fpecies of
tenants ftill fubfifts in fome parts of Scotland. They are called
fteel-bow tenafts. Thofe antient Englifh tenants, who are faid
‘by chief Baron Gilbert and Doétor Blackftone to have been rather
bailiff,

rT] £

THE WEALTH OF NATIONS.

478

bailiffs of the landlord than farmers properly fo called, were pro- C HAR.

bably of the fame kind,

To this fpecies of tenancy fucceeded, though by very flow
degrees, farmers properly fo called, who cultivated the land with
their own ftock, paying a rent certain to the landlord. When fuch
farmers have a leafe for a term of years, they may fometimes find
it for their intereft to lay out part of their capital in the further
improvement of the farm; becaufe they may fometimes expeét to
recover it, with a Jarge profit, before the expiration of the leafe.
The poffeffion even of fuch farmers, however, was long extreamly
precarious, and {till is fo in many parts of Europe. They could
‘before the expiration of their term be legally outed of their leafe,
by a new purchafer; in England, even by the fictitious action of a
common recovery. If they were turned out illegally by the violence
of their mafter, the aétion by which they obtained redrefs was ex-
treamly imperfe&. It did not always re-inftate them in the pof-
feffion of the land, ‘but gave-them damages which never amounted
to the real lofs, Even in England, the country perhaps of Europe
where the yeomanry has always been moft refpeéted, it was not
till aboutithe 14th of Henry the VIIth that the action of ejeétment
was invented, by which the tenant recovers, not damages only’but
poffeffion, and in which his claim is not neceffarily concluded by
the uncertain decifion of a fingle affize. ‘This aétion ‘has been
found fo effectual a remedy that, in the modern practice, when the
landlord has occafion to fue for the poffeffion of the land, he feldom
makes ule of the actions which properly belong to him as-landlord,
the writ of right or the writ of entry, but fues in the name of
his tenant, by the writ of ejectment. In England, therefore, the

fecurity of the tenant is equal to that of the proprietor. In
England befides,a leafe for life of forty ‘fhillings a year value is a
frechold, and enititles the leffee to vote for a member of parliament s
aFs and

476

THE NATURE AND CAUSES OF

BOOK and asa great part of the yeomanry have freeholds of this kind;
ole the whole order becomes refpectable to their landlords on account

of the political confideration which this gives them. There is, I
believe, nowhere in Europe, except in England, any inftance of
the tenant building upon the land of which he had no leafe, and
trufting that the honour of his landlord would take no advantage.
of fo important an improvement. Thofe laws and cuftoms fo
favourable to the yeomanry, have perhaps contributed more to the
prefent grandeur of England than all their boafted regulations of.
commerce taken. together..

Tue law which fecures: the’ longeft leafes againft fucceffors of’
every kind is, fo far as I know, peculiar to. Great Britain.. It was:
introduced into-Seotland.fo early as 1449, by a.law of James the Ild..
Its beneficial influence, however, has been much obftructed hy.
entails; the heirs of entail being generally reftrained from letting
leafes for. any long term. of years, frequently for more than one
year. A. late act of parliament has, in this refpect, fomewhat

flackened their fetters, though they. are ftill by much too ftrait..

In Scotland,. befides,. as no. leafehold gives a vote for a member of.

- parliament, the yeomanry are upon this account lefs refpectable to.
their landlords than.in England. :

In other parts.of Europe, after it was found convenient to fecure :
tenants both againft heirs and purchafers, the term of their fecurity.
was ftill limited to.a very fhort period ;,in France, for example,
to nine years from the commencement of the leafe.. It has in-that.
country, indeed, been lately extended to. twenty feven,. a period.
ftill too fhort to encourage the tenant to make the moft important.
improvements. The proprietors. of land were. antiently the legif-.
lators of every part of Europe, The laws relating to land, there-.
fore, were all calculated for what they fuppofed the intereft of the
Proprietor, It was for his intereft, they had imagined, that no.

4 leafe

THE WEALTH OF NATIONS,

477

Feafe granted by any. of: his predeceffors fhould hinder him from CHAP.
enjoying, during a long term of years, the full value of his land. C+-——

Avarice and injuftice are always fhort-fighted, and they did not
forefee how much this regulation muft obftruct improvement, and
thereby hurt in the long run.the real intereft of the landlord.

Tue farmers too, befides paying the rent, were antiently, it
was fuppofed, bound to perform a great number of fervices to
the landlord, which were feldom either fpecified in the leafe, or
regulated by any precife rule, but by the ufe and wont of the
manor or barony. Thefe fervices, therefore, being almoft en-
tirely arbitrary, fubjected the tenant to many vexations. In Scot-
land the abolition: of all fervices, not precifely ftipulated in the
leafe, has in the courfe of a few years very much altered for the
better the condition of. the. yeomanry of that country.

Tue publick fervices to which the yeomanry were bound, were

not: lefs arbitrary than the private ones. To make and maintain.

the high: roads, a fervitude which ftill fubfifts,. I believe, . every
where, though with different degrees of oppreffion in different
‘countries, was not the only one. When the king’s troops; when
his houfhold or. his officers of. any kind pafled through any part of

the country, the yeomanry: were bound. to provide them with horfes, .
carriages, and: provifions, at a- price regulated by the purveyor...

Great’ Britain is, I believe, the only.monarchy. in Europe where

the oppreffion: of: purveyance has. been entirely abolifhed.. It ftill:

fubfifts in France and Germany. .

Tue publick taxes to’ which they were fubject were as irregular.
and oppreffive as the fervices. The antient lords, though extreamly '

unwilling to grant themfelves any pecuniary aid to their fovereign,

eafily- allowed him -to.tallage, as they called it, their tenants, and:

saretlasthasenstenentin” Santen

498

THE NATURE AND CAUSES OF

BO.OK had not knowledge enough to forefee how much this muft in the

toxpew end affect their own revenue. The taille, as it {till fubfifts in France,

may ferve as an example of thofe antient tallages, It is a tax upon
the fuppofed profits of the farmer, which they eftimate by the
ftock that he has upon the farm. It is his intereft, therefore, to
appear to have as little as poffible, and confequently to employ as
little as poffible in its cultivation, and none in its improvement.
Should any {tock happen to accumulate in the hands of a French
farmer, the taille is almoft equal to a prohibition of its ever being
employed upon the land, This tax befides is fuppofed to difhonour
whoever is fubject to it, and to degrade’ him below, not only
the rank of a gentleman, but that of a burgher, and whoever
rents the lands of another becomes fubject toit. No gentleman
nor even any burgher that has ftock will f{ubmit to this degradation.
This tax, therefore, not only hinders the ftock which accumulates
upon the land from being employed in its improvement, but drives
away all other ftock from it. The antient tentlis and fifteenths, fo
ufual in England in former times, feem, fo far as they affected the

Jand, to have been taxes of the fame nature with the taille.

' Unper all thefe difcouragements, little improvement could be
expected from the occupiers of land. That order of people, with
all the liberty ‘and fecurity which law-can give, muft always improve
under great difadvantages. The ‘farmer compared with the :pro-
prictor, ‘is‘as a ‘nierchant who trades with borrowed money :com-

‘pared with one'who trades with ‘his own, ‘The ftock ofboth may

improve, but that of the one, with only-equalgood conduct, mutt
always improve more flowly than that of the other, on account of
the large fhare of the profits which is confumed by the intereft of
the loan, The lands cultivated by the farmer muft, in the fame
manner, with only equal good conduct, -be improved more flowly

than thofe cultivated by the proprietor; on ‘account of the large

fhare

THE WEALTH OF NATIONS.

479

fhare of the produce which is confumed in the rent, and which, had CH AP,
the farmer been proprietor, he might have employed in the further —-~—

improvement of the land. The ftation of a farmer befides is, from
the nature of things, inferior to that of a proprietor. Through
the greater part of Europe the yeomanry are regarded as an infe~
rior rank of people; even to the better fort of tradefmen and
mechanics, and in all parts of Europe to the great merchants and
mafter manufacturers. It can feldom: happen, therefore, that a
man of any confiderable {tock fhould quit the fuperior in order
to place himfelf in an inferior ftation, Even.in, the preferit ftate
of Europe, therefore, little ftock is likely to go from any other pro
feffion to the improvement of land in the way of farming. More
does perhaps in Great Britain than in any other’ country, though
even there the great’ ftocks which are, in fome places, employed
in farming, have generally been acquired by farming, the trade,

perhaps, in which of all others ftock is commonly acquired moft.

flowly. After fmall proprietors, however, rich and great far-
mers are, in every country, the principal improvers.. There are
more fueh perhaps in England than in any other European
monarchy. In the republican governments of Holland and of

Berne in Switzerland,. the farmers are faid to be not inferior to thofe:

of England..

Tue antient policy of Europe was, over and: above all this,.

unfavourable to the improvement and cultivation of land, whether

carried on by the proprietor or by the farmer ;. firft, by the. general.

prohibition of the exportation of corn without a fpecial licence,

which feems to have been a very univerfal regulation ; and fecondly, ,

by the reftraints which were laid upon the inland commerce, not only

of corn but of almoft every other part of the. produce of. the:

farm, by the abfurd laws againft engroffers, regrators, and fore-
ftallers, and by the privileges of fairs and markets. It has already:

been.

480

THE NATURE AND CAUSES OF

BOOK been obferved in what manner the prohibition of the exportation of
‘—~~~ ‘corn, together with fome encouragement given to the importation

of foreign corn, obftructed the cultivation of antient Italy, naturally
the ‘moft fertile country in Europe, and at that tine the frat of
the greateft empire in the world. To what degree fuch reftraints
upon the inland commerce of this commodity, joined to the gene-
ral prohibition of exportation, muft have difcouraged the cul-
tivation of countries lefs fertile, and lefs favourably circumftanced,

it is not perhaps very eafy to imagine.

CHAP. Il

Of the Rife and Progrefs of Cities and Towns, after the Fall of
the Roman Empire.

HE inhabitants of cities and towns were, after the fall

of the Roman empire, not more favoured than thofe of

the country. They confifted, indeed, of a very different order of
people from the firft inhabitants of the antient republicks of Greece
and Italy. Thefe laft were compofed chiefly of the proprietors of
lands, among whom the publick territory was originally divided,
and who found it convenient to build their houfes in the neigh-
ourhood of one another, and to furround them with a wall, for
the fake of common defence. After the fall of the Roman empire,
on the contrary, the proprietors of lands {cem generally to have
lived in fortified caftles on their own eftate:, and in the midft of
their own tenants and dependants. The towns were chiefly inha-
‘bited by tradefmen and mechanicks, who feem in thofe days to
thave been of fervile, or very nearly of fervile condition.. The pri-
vileges

THE WEALTH OF NATIONS.

481

vileges which we find granted by antient charters to the inkabitants C aA P,
of fome of the principal towns in Europe, fufficientty fhow what —~—.

they were before thofe grants. The people to whom it is granted
as a privilege, that they might give away their own daughters in
marriage without the confent of their lord, that upon their death
their own children, and not their lord, ffiould fucceed to their
goods, and that they might difpofe of their own effects ty will,
mutt, before thofe grants, have been either altogether, or very nearly
in the fame ftate of villanage with the occupiers of land im the
country.

Tuey feem, indeed, to have been a very poor, mea fett wf
people, who ufed to travel about with their goods from ) Mer *
place, and from fair.to fair, like the hawkers and pedlars of the »re-
fent times. In all the different countries of Europe then, in the
manner as in feveral of the Tartar governments of Afia at p: nt,
taxes ufed to be levied upon the perfons and goods of travellers,
when they, pafled through. certain manors, when they went «er
certain bridges, when they carried about their goods from place to
place in a fair, when they erected in it a booth or ftall to fell theen
in. Thefe different taxes were known in England by the names):
paflage, pontage, laftage, and ftallage, Sometimes the king
fometimes a.great lord, who had, it fems,. upon fome occafions,
authority to do this, would grant to particular traders, to fuch
particularly as lived in their own demefnes, a general exemption
from fuch taxes. Such traders, though in other refpects of fer-
vile, or very nearly of fervile condition, were upon this account
called Free-traders, They in return ufually paid to their pro-
te€tor a fort of annual poll-tax. Jn thofe days protection was
feldom granted without a valuable confideration, and this tax
might, perhaps, be confidered as compenfation for what their
patrons might lofe by their exemption from other taxes. At firft,

Vor, I. ¢Q both

482

THE NATURE AND CAUSES OF

BOOK both thofe poll-taxes and thofe exemptions feem to have been
——~ altogether perfonal, and to have affeéted only particular indivi-

duals, during either their lives, or the pleafure of their protectors.
In the very imperfe& accounts which have been publifhed from
Domefday-book, of feveral of the towns of England, mention
is frequently made, fometimes of the tax which particular burghers
paid, each of them, either to the king, or to fome other great lord,
for this fort of protection, and fometimes of the general amount
only of all thofe taxes.

But how fervile foever may have been originally the condition
of the inhabitants of towns, it appears evidently, that they arrived
at liberty and independency much earlier than the occupiers of
land in the country. That part of the king’s revenue which arofe
from fuch poll-taxes in any particular town, ufed commonly to
be lett in farm, during a term of years for a rent certain, fome-
"times to the fheriff of the county, and fometimes to other perfons.

‘The burghers themfelves frequently got credit enough to be
admitted to farm the revenues of this fort which arofe out

of their own town, they becoming jointly and feverally an-
fwerable for the whole rent. To lett a farm in this manner was
quite agreeable to the uftial ceconomy of, I believe, the fovereigns
of all the different countries of Europe; who ufed frequently to
lett whole manors to all the tenants of thofe manors, they be
coming jointly and feverally anfwerable for the whole rent; but in
return being allowed to collect it in their own way, and to pay
it into the king’s exchequer by the hands of their own bailiff, and
being thus altogether freed from the infolence of the king’s officerss

a circumftance. in thofe days regarded as of the. greateft impor=
tance,

‘THE WEALTH .OF NATIONS,

483

‘Ar firft, the farm of the town was probably lett tothe burghers, C io APi
in the fame manner as itshad been to other farmers, . fora term of at

yeats only.’ In°pfocefs of time, however, it feems to have be-
come the general ‘practice to grant.it to them in fee, that is forever,
referving a rent certain never afterwards to be augmented.. The
payment’ iaving thus become perpetual, the exemptions, in return
for which it. ‘was! made, naturally became perpetual too. Thofe
exemptions, therefore, ceafed to be perfonal, and could not after-
wards be confidered as belonging to individuals as individuals, but
as burghers of .a particular burgh, which, upon this account,
was called a Free-burgh, for the fame reafon that they had been
called Free-burghers or Free-traders,

* Arone with this grant, the important privileges above men-
tioned, that they might give away their own daughters in marriage,
that'their children fhould fucceed: to them, and that they might
difpofe of their own effects by will, were generally beftowed upon
the burghers of the town to:whom it was given. Whether fuch
privileges had before been ufually granted along with the freedom of
trade, to particular burghers, as individuals, I know not.’ ‘I
reckon it not improbable that they were, though I cannot produce
any direct evidence of it. But however this may have been, the
principal attributes of villanage and flavery being thus taken away
from them; they now, at leaft, became really free in our prefent
fenfe of the word Freedom.

Nor was this all. They were generally at the fame time
erected into a commonality or corporation, with the privilege of
having magiftrates and a town council of their own, of making
bye laws for their own government, of building walls for their own
defence, and of reducing all their inhabitants under a fort of
military difcipline, by obliging them to watch and ward, that is,

3 Q2 as

484

THE NATURE AND CAUSES OF

—=&B 90 K as antiently underftood, to guard ana defend thofe walls againft all.

te-a-—w attacks and furprifes by night as well as by day. In England

they were generally exempted from fuit to the hundred and
county courts; and all fuch pleas as fhould arife among them,
the pleas of the crown excepted, were left to the decifion of their
own magiftrates. In other countries much greater and- more
extenfive jurifdictions were frequently granted to them.

Ir might, probably, be neceflary to grant to fuch towns as were
admitted to farm their own ‘revenues, fome fort of compulfive
jurifdiction to oblige their own citizens to make payment, In thofe
diforderly times it might have ‘been extremely inconvenient to
have left them to feek this fort of juftice from any other tribunal.
But it muft feem extraordinary that the fovereigns of all the different
Countries of Europe, fhould have exchanged in this manner
for a rent certain, never more to be augmented, that branch of .
their revenue, which was, perhaps, of all others the moft likely
to be improved, by the natural courfe of things, without either ex-
pence or attention of theirown : and that they fhould, befides, have
in this manner voluntarily erected a fort of independent republicks
in the heart of their own dominions,

Iv order to underftand this it muft be remembered, that in thofe
days the fovereign of perhaps no country in Europe, was able to
protect, through the whole extent of his dominions, the weaker
part of his fubjects from the oppreffion of the great lords. Thofe
whom the law could not protect, and who were not ftrong
enough to defend themfelves, were obliged either to have recourfe
to the protection of fome great lord, and in order to obtain it
to become either his flaves or vaflals; or to enter into a league
of mutual defence for the common protection of one another,
The inhabitants of cities and burghs, confidered as fingle indi-«

viduals,

THE WEALTH OF NATIONS.

viduals, had''‘no power to defend themfelves: but by entering into
a league of mutual defence with their neighbours, they were capable
of making’ no contemptible refiftance. The lords defpifed the
burghers, whom they confidered not only as of a different order,
but as a. parcel of emancipated flaves, almoft of a different:
fpecies from themfelves, The wealth of the burghers never failed
to provoke their envy and indignation, and:they plundered them:
upon every occation without mercy or remorfe. The burghers:
naturally hated. and feared: the lords. The king hated and feared.
them.too; but though perhaps he might defpife, he had no reafon
either to hate or fear the burghers. Mutual intereft, therefore,
difpofed them to fupport the king, and’ the king to fupport them
againft the lords. They: were the enemies of his enemies, and it

was his intereft to render them. as fecure and independent of thofe:

enemies as he could. By granting. them. magiftrates of their own,.

the privilege of making bye-laws for their own government, that of |

building walls for their own defence, and that of reducing all their’
inhabitants under a fort of military difcipline, he gave them all:
the means of fecurity and independency of the barons which it was.
in his power to beftow. Without the eftablithment of fome regular’
government of this kind,. without fome authority to compel their

inhabitants to. act according to fome certain plan. or fyftem, no-

voluntary league of mutual defence could either have afforded them.
any permanent fecurity, or have enabled them to give the king.
any confiderable fupport. By granting them the farm.of their town:
in fee, he took away from thofe whom he wifhed to have for. his:
friends, and, if one may fay fo, for his allies, all ground. of jea-
loufy and fufpicion that he was ever afterwards to opprefs them,.
either by raifing the farm rent. of their town, or by granting it:
~ to fome other farmer.

Tus princes who lived upon the worft terms with their barons,
Seem accordingly to. have been the moft liberal. in grants of this:

kind:

485

CHAP,
Ill.

486 THE NATURE AND CAUSES OF

B a dae kind to their burghs. King John of England, for example, appears

t—— _ to have been a moft munificent benefaétor to his towns. Philip
the firft of France loft all authority over his barons. ‘Towards
the end of his reign, his fon Lewis, known afterwards by the name
of Lewis the Fat, confulted,; according to father Daniel, with the
bifhops of the royal demefnes, concerning the moft proper means
of reftraining the violence of the great lords.. Their: advice con-
fifted of two different propofals. One was to erect a new order
of jurifdiction, by eftablifhing magiftrates and a town council in
every confiderable town of his demefnes. The other was to form a
new militia, by making the inhabitants of thofe towns, under the com-
mand of their own magiftrates, march out upon proper occafions to
the affiftance of the king. It is from this period, according to the
French auatiquarians, that we are to date the inftitution of the
magiftrates and councils of cities in France. It was during the
unprofperous reigns of the princes of the houfe of Suabia that the
greater part of the free towns of Germany received the firft grants
of their privileges, and that the famous Hanfeatic league firft
became formidable.

Tue militia of the cities feems, in thofe times, not to have been
inferior to that of the country, and as they could be more readily
affembled upon any fudden occafion, they frequently had the ad-
vantage in their difputes with the neighbouring lords. In coun-
tries, fuch as Italy and Switzerland, in which, on account
either of their diftance from the principal feat of government, of the
natural ftrength of the country itfelf, or of fome other reafon, the
fovereign came to lofe the whole of his authority, the cities generally
became independent republicks, and conquered all the nobility in
their neighbourhood ; obliging them to pull down their caftles in
the country, and to live, like other peaceable inhabitants, in the
city. This is the fhort hiftory of the republick of Berne, as well as

THE WEALTH OF NATIONS.

of feveral other cities in Switzerland. If you except Venice, for of CH AP.
that city the hiftory is fomewhat different, it is the hiftory of all the —y~—

confiderable Italian republicks, of which fo great a number arofe and
perifhed, between the end of the twelfth and the beginning of the
* fixteenth century.

In countries fuch.as France or England, where the authority
of the fovereign, though frequently very low, never was deftroyed
altogether, the cities had no opportunity of becoming entirely in-
dependent. They became, however, fo confiderable that the fove-
reign could impofe no tax upon them, befides the ftated farm rent
of the town, without their own confent. They were, therefore,
called upon to fend deputies to the general affembly of the ftates
_ of the kingdom, where they might join with the clergy and the
barons in granting, upon urgent occafions, fome extraordinary aid
to the king. Being generally too more favourable to his power,
their deputies feem, fometimes, to have been employed by him as.
a counter-balance to the authority of the great lords in thofe affem-
blies. Hence the origin of the reprefentation of burghs in the
ftates general of all the great monarchies in Europe.

OrpeR and good government, and along with them the liberty
and fecurity of individuals, were, in this manner, eftablifhed in
cities at a time when the occupiers of land in the country were exe
pofed to every’ fort of violence . But men in this defencelefs ftate
naturally content themfelves with their neceflary fubfiftence ;. be-
caufe to acquire more might only tempt the injuftice of their op-
preffors. On the contrary, when they are fecure of enjoying the
fruits of their induftry, they naturally exert it to better their cons
dition, and to acquire not only the neceffaries, but the conveniencies
and. elegancies of life. That induftry, therefore, which aims at
fomething more than neceflary fubfiftence, was eftablifhed in cities
long before it was commonly practifed by the occupiers of land
uy

487

438 THE NATURE AND CAUSES OF

B GOR in the country. If in the hands of a poor cultivatoy,’ oppieffed

ty with the fervitude of villanage, fome little ftock flould accumulate;
he would naturally conceal it with great care from his ‘matter,
to whom it would otherwife have belonged, and take the firft op-
portunity of running away toa town. The law was at: that'time
fo indulgent to the inhabitants of towns, and fo defirous of di-
minifhing the authority of the lords over thofe of the country,
that if he could conceal himfelf there from the purfuit of his lord
for a year,’he was free for ever. Whatever ftock, therefore,
accumulated in the hands of the induftrious part of the inhabitants
of the country, naturally took refuge in cities, as the only
fan&tuaries in which it could be fecure to the perfon that ace
quired it.

Tue inhabitants of a city, it is true, muft always ultimately
derive their fubfiftence, and the whole materials and means of their
induftry from the country. But thofe of a city, fituated near either
the fea-coaft or the banks of a navigable river, are not neceffarily
confined to derive them from the country in their neighbourhood,
They have a much wider range, and may draw them from the
moft remote corners of the world, either in exchange for the ma-
nufactured produce of their own induftry, or by performing the
office of carriers between diftant countries, and exchanging the
produce of one for that of another. A city might in this manner
grow up to great wealth and fplendor, while not-only the country
in its neighbourhood, but all thofe to which it traded, were in
poverty and wretchednefs. Each of thofe countries, perhaps, taken
fingly, could afford it but a fmall part, either of its fubfiftence, or-of
its employment; but all of them taken together could afford it both
a.great fubfiftence and a great employment. There were, how-
ever, within the narrow circle of the commerce of thofe times,
fome countries that were opulent and induftrious,. Such was the

7 Greek

PS B19"

THE WEALTH OF NATIONS.

489

Greek empire as long as it fubfifted, and that of the Saracens during C HA P,
the reigns of the Abaffides. Such too was Egypt till it was con- G-y—wJ

quered by the Turks, fome part of the coaft of Barbary, and all
thofe provinces of mun which were under the government of the
Moors.

Tue cities of Italy feem to have been the firft in Europe which
were raifed by commerce to any confiderable degree of opulence,
Italy lay in the center of what was at that time the improved
and civilized part of the world. The Cruzades too, though by
the great wafte of ftock and deftruction of inhabitants which they
occafioned, they muft neceffarily have retarded the progrefs of the
greater part of Europe, were extreamly favourable to that of fome
Italian cities. The great armies which marched from all parts
to the conqueft of the holy land, gave extraordinary encouragement
to the fhipping of Venice, Genoa, and Pifa, fometimes in tranfport-
ing them thither, and always in fupplying them with provifions.
They were the commiffaries, if one-may fay fo, of thofe armies;
and the moft deftructive frenzy that ever befel the European nations,
was:a fource of opulence to thofe republics.

Tue inhabitants of trading cities, by importing the improved
manufactures and expenfive luxuries of richer countries, afforded
fome food to the vanity of the great proprietors, who eagerly pur-
chafed them with great quantities of the rude produce of their own
lands. The commerce of a great part of Europe in thofe times
accordingly, confifted chiefly in the exchange of their own rude,
for the manufactured produce of more civilized nations, Thus
the wool of England ufed to be exchanged for the wines of France,
and the fine cloths of Flanders, in the fame manner as the corn
of Poland is at this day exchanged for the wines and brandies of
France, and for the filks and velvets of France and Italy.

Vou. I. 3R | A TASTE

49° THE NATURE AND CAUSES OP

BO we A TA8'Ps for the finer and more improved manufactures, wae in
w—~_ this mannes iatroduced by foreign commerce: into. countries where
no fach works were carried on. Bug when thie tate hecame fo
general as to occafion a confiderable demand, the. merchants, in
order to fave the expence of carriage, naturally endeavoured to
eftablifh fome manufactures of the fame kind in their own country,
Hence the origin of the firft manufactures for diftant fale. that
feem to, have, been eftablifhed, in, the. weftern provinces of Europe;
after the. fall of the Roman, empire,,

No. large-countzy,. it muft be obferved, ever did or could fubfi®
without fome: fort: ofi manufactures, being carried on in. it; and: wher
it-i8. faid of any fuch country: that: it has:no manufactures, it: mut
always be underftood: of: the finer and: more improved,. on ofi fuch
as.are: fit for. diftant fale. In every large country, both.the cloath-
ing: and: houfhold furniture of the: far greater’ part of the people,
are the. produce of their own induftry. This is. even. more univer
fally. the cafe in thofe poor countries which: are commonly: faid: io
have no manufactures, than in thofe rich- ones that: are fuid! to
abound in them. In the latter, you will'generally-find, both in-the
cloaths and houfhold furniture of the loweft rank of people, a
much greater proportion. of: foreign productions: than in: the
former, ay

.. uoss. manufactures which are: fit for diftant fale; feem to have
been introduced into different countries:in two: different ways,

| Sometimes they: have been introduced, in the manner above
mentioned, by the- violent operation; if one may: fay fo; of the
ftocks of particular merchants and: undertakers, who: eftablifhed
them in imitation of fome foreign manufactures of ' the fame
kind. Such manufactures, therefore, are the offspring of foreign

commerce,

THE WEALTH OF NATIONS.

commerce; and fuch feem td ha\ cen the antient manufactures CH tn et

49%

of filks, velvets, and brocades that were introduced into Venice e\—~

in the beginning of the thirteenth century. Such too feem to have
been the manufaétures of fine cloths that antiently flourifhed in
Flanders, and which were introduced into England in the beginning
of the reign of Elizabeth; and fuch ate the prefent filk manu-
factures of Lyons and Spital-fields. Manufaétures introduced in
this manner are generally employed upon foreign materials, being
in imitations of foreign manufactures. When the Venetian
manufacture flourifhed, there was not a mulberry tree, nor confe-
quently a filkworm in all Lombardy. They brought the materials
from Sicily and from the Levant, the manufaéture itfelf being in
imitation of thofe carried on in the Greek empire. Mulberry
trees were firft planted in Lombardy in the beginning of the fix-
teenth century, by the encouragement of Ludovico Sforza duke
of Milan. The manufactures of Flanders were carried on chiefly
with Spanifh and Englifh wool. Spanifh wool was the material;
not of the fir woollen manufacture of England, but of the firft
that was fit for diftant fale. More than one half the materials of
the Lyons manufacture is at this day foreign filk; when it was
firft eftablifhed, the whole or very nearly the whole was fo. No
part of the materials of the Spital-fields manufa€ture is ever likely
to be the produce of England. The feat of fuch marvfactures,
as they are generally introduced by the {cheme and project of a few
individuals, is fometithes eftablithed in a maritime city, and fome-
times in an inland town, according as their intereft, judgement or
caprice happen to determine.

AT other times manufactures for diftant fale grow up naturally,
and: as it were: of their own’ accord; by the gradual’ refinentent of
thofe houfhold: and courfer miariufattures which mutt at all times
be carried ow even’ in the pooref and rude countries. Such
3Re2 manufactures

492

THE NATURE AND CAUSES OF

BOOK manufactures ‘are generally employed’ upon the materials’ “which
—~ the country produces, and they feem frequently to have been firft

refined and improved. in fuch inland countries as were, not indeed
at a very great, but at a ‘confiderable diftance from the fea coaft,’
and fometimes even from all water carriage. An inland country
naturally fertile and eafily cultivated, produces a great furplus of
provifions beyond what is neceffary for maintaining the cultivators,
and on account of the expence of land carriage, and inconveniency
of river navigation, it may frequently be difficult to fend this fur-
plus abroad. Abundance, therefore, renders provifions cheap,
and encourages a great number of workmen to fettle in the neigh-
bourhood, who find that their induftry can there procure them
more of the neceffaries and: conveniencies of \ife than in other
places. They work up the materials of manufacture which the
land produces, and exchange their finifhed work, or what is the
fame thing the price of it, for more materials and provifions. They
give a new value to the furplus part of the rude produce by faving
the expence of carrying it to the water fide or to fome diftant market ;
and they furnifh the cultivators wit’: fomething in exchange for
it that is either ufeful or agreeable to chem, upon eafier terms than
they could have obtained it before. The: cultivators get‘a’ better
price for their furplus produce, and’ can: purchafe cheaper other
conveniencies which they have-occafion for. They are thus both
encouraged and enabled to increafe this furplus produce by a further
improvement and better cultivation of the land; and as the fers
tility of the land had given birth to the manufacture, fo the pro-.
grefs of the manufacture re-acts. upon. the land, and increafes {tilf
further its fertility. The manufacturers firft fupply the neigh-
bourhood, and afterwards, as their work improves and refines, more:
diftant markets. For though neither the rude produce, nor even
the coarfe manufacture could, without the greateft: difficulty, fup-
port the expence of a confiderable land: carriage, the refined: and

4 improved,

THE WEALTH OF NAT ONS,

493

improved, manufacture. eafily, may, , In a fmal!l wlk it frequently CHAP.
contains the price of a-great quantity of rude produce. A piece ae.

of fine cloth, for example, which weighs only eighty pounds, con-
tains in it, the price, not only of eighty pounds. weight of wool,
but fometimes of feveral thoufand weight of corn, the maintenance
of the different working people, and of their immediate employers.
The corn which could with. difficulty have been carried abroad in
its own. fhape, isin. this manner virtually exported in that of the
complete manufacture, and may ecafily be fent to the remoteft
corners of the world. In this manner have grown up naturally,
and as it were of their own accord, the manufactures of Leeds,
Halifax, Sheffield, Birmingham, and Wolverhampton. Such
manufactures are the offspring. of agriculture. In the modern
hiftory of Europe, their extenfion and improvement have generally
been. pofterior to thofe. which were. the offspring of foreign com-
merce. England was.noted for the manufacture of fine cloths made
of Spanifh wool, more than a century before any of thofe which now
flourifh in the places above mentioned were fit for foreign fale. The
extenfion and improvement of thefe laft could not take place but in
confequence of the extenfion and improvement of agriculture,
the laft and greateft effect of foreign commerce, and. of the manu-
faétures immediately introduced by it, and which I fhall now pro~
ceed.to explain.

THE NATURE AND CAUSES OF

CHAP. IV,

How the Commerce of the Towns contributed to the Improvement of
the Country.

HE inereafe and riches of eommercial and manufacturing
towns, contributed to the improvement and cultivation of
the countries to which they belonged, in three different ways.

First, by affording a great and ready market for the rude
produce of the country, they gave encouragement to its cultivation
and further improvement. This benefit was not even confined to
the countries in which they were fituated, but extended more or lefs
to all thofé with which they had any dealings, To all of them
they afforded a market for fome part either of their rude or manu-
factured produce, and confequently gave fome encouragement to
the induftry and improvement of all, Their own country, how-
ever, on account of its neighbourhood, neceffarily derived the greateft
benefit from this market. Its rude produce being charged with
lefs carriage, the traders could pay the growers a better price for it,
and yet afford it as cheap to the confumers as that of more diftant
countries.

SeconDLY, the wealth acquired by the inhabitants of cities was
frequently employed in purchafing fuch lands as were to be fold,
of which a great part would frequently be uncultivated. Mer-
chants are commonly ambitious of becoming country gentlemen,
and when they do, they are generally the beft of all improvers. A
merchant is accuftomed to employ his money chiefly in profitable
projects; whereas a mere country gentleman is accuftomed to

employ

THE WEALTH OF NATIONS,

49§

employ it chiefly im expence. The one often fees his money go CHAP.
from him and return to him again with a profit: Fhe other when e+ —

once he parts with it, very feldom expects to fee any more of it.
Thofe different habits naturally affect their temper and difpofition
in every fort of bufinefs. A merchant is commonly a bold; a
country gentleman, a timid undertaker. The one is not afraid)
to lay out at once a large capital’ upon the improvement of his’
land, when: he’ has a probable:profpect of raifing the value of it itv
proportion to the expence. The other, if he has any capital,
which is not’ always the cafe, feldom ventures to employ it in this
manner. FF Ke improves-at all, it is commonly not with ac

but: with what he'can fave out’ of his annual revenue. W!

has had the‘ fortune to live ina metcantile town fituated in-an un-
improved country, muft have frequently obferved how much more’

fpirited the operations‘of merchants were'in this way, than’thofe of

mere country gentlemen. The habits, befides, of ordér, ceconomy
and attention, to which mercantile bufinefs' naturally forms: a:
merchant, render him much, fitter to execute, with profit and
fuccefs, any project’ of improvement.

Turrbiy, and. laftly, commerce and; manufactures gradually
introduced order and good. government, and’ with them, the liberty
and fecurity of. individuals, among the inhabitants. of the country,,

who had: before lived. almoft in. a continual {tate of war with. their:
neighbours, and of fervile dependency upon. their fuperiors.. This,.

thoughit has. been the leaft obferved, is» by far the moft important.
of all their effects. Mr. Hume is the. only writer who,’ fo far as
I know, has hitherto taken notice of it.

In a country which has neither foreign commerce, nor any of the
- finer manufactures, a great proprietor, having’ nothing for which"he

can exchange the greater part of the produce of his lands which is’

over and above the maintenance’ of the‘ cultivators; corifutnes the

7 whole:

496

THE NATURE AND CAUSES OF

BOOK whole in ruftick hofpitality athome. If this furplus produce is fuf-
~~ ficient to maintain a hundred or a thoufand men, he can make ufe of

it in no other way than by maintaining a hundred or a thoufand men,
He is at all times, therefore, furrounded with a multitude of
retainers and dependants, who having no equivalent to give in
return for their maintenance, but. being fed entirely by his bounty,
muft obey him, for the fame, reafon that foldiers muft.obey the
prince who pays them. Before the extenfion of commerce and
manufactures in Europe, the hofpitality of the rich and the greats.
from the fovereign down to the fmalleft baron, exceeded every thing
which in the prefent times we can eafily form a notion of. Weft-
minfter hall was the dining room of William Rufus, and might
frequently, perhaps, not be too large for his company. It was
reckoned a piece of magnificence in Thomas Becket, that he:
ftrowed the floor of his hall with clean hay or rufhes in the feafon,
in order that the knights and quires, who could not get feats, might
not fpoil their fine cloaths when they fat down on the floor to eat
their dinner. The great earl of Warwick is faid to have entertained
every day at his different manors, thirty thoufand people; and
though the number here,may have been exaggerated, it muft, how-
ever, have been very great to admit of fuch exaggeration. A hof-
pitality nearly of the fame kind was exercifed not many yeais ago
in many different parts of the highlands of Scotland. It feems
to be common ‘in: all nations to whom commerce and manufaCtures
ate little known. I have feen, fays Doctor Pocock, an Arabian
chief dine in the ftreets of a town where he had come to fell his
cattle, and invite all paffengers, even common beggars, to fit down
with him and partake of his banquet.

_ Tue occupiers of land were in every refpect as dependent upon
the great proprietor a8 his retainers. Even fuch of them as were
not in a ftate of villanage, were tenants at will, who paid a rent

THE WEALTH OF. NATIONS.

in no refpect equivalent to the fubfiftence which the land afforded
them. A crown, half a crown, a theep, . a lamb, was fome. years
aga in. the highlands of Scotland a common rent for lands which
maintained a family. In fome places it is {0 at this day; nor will
money at prefent purchafe a greater quantity of commodities there
than in other places, In a country where the furplus produce of
a large eftate muft be confiymed upon the eftate itfelf, it will fre-
quently be more convenient for the proprietor, that part of it be
confumed at a diftance from his own houfe, provided they who
confume it are as dependant upon him as ‘either his retainers or
his menial fervants. He is thereby faved from the’ embarraffment
of either too large a company or too large a fantily. A tenant
‘at will, who poffeffes ‘land fufficient to maintain his’family for little
more than a,quit-rent, is as dependant upon the propri¢tor as any
fervant or retainer whatever, and muft’ ‘Obey him with as little
referve. Such a proprietor, as he feeds-his fervants and retainers
at his own houfe, fo he feeds his tenants at their houfes. The
fubfiftence of both is derived from his bounty, and its continuance
depends upon his good pleafure. —

Upon the authotity which the great proprietors neceflarily
had in fuch a ftate of things over their tenants and ‘getainers, was
founded the power of the antient barons.’ They neceflarily' became
the judges-in peace, and the, leaders in war, of all who dwelt
‘upon their ‘eftates. \ ‘Fhey could ‘maintain .order'and execute the
‘law within their refpectivedemefnes, becaufe each of them could
there turn the whole foree of all the inhabitants againft the injuftice
of any one. No other perfon had fufficient authority to do this.
The king in particular had not. In thofe antient.times he was
little more than the greateft proprietor in his dominions, to
whom for the fake of common defence agaanft their common ene-
mies, the other great proprietors paid certain refpects. To have
enforeed payment of a fmmall debt within the lands of a great pro-

Vou. I, 3 8 prietor,

497

CHAP.
lV.
i dt a

498

THE NATURE AND CAUSES OF

BOOK prietor, where all the inhabitants were armed and accuftomed to
—y— ftand by one another, would have coft the king, had he attempted

it by his own authority, almoft the fame effort-‘as to extinguifh
a civil war. He was, therefore, obliged to abandon the adminif-
tration of juftice through the greater part of the country, to thofe
who were capable of adminiftering it; and for the fame reafon. to
leave the command of the country ‘militia to thofe whom that
militia would obey.

Ir is a miftake to imagine that thofe territorial jurifdiétions took
their origin from the feudal jaw. Not only the higheft jurifdictions
both civil and criminal, but the power of levying troops, of coin-
ing money, and even. that of making bye-laws for the government
of their own people, were all rights poffefled allodially by the great
proprietors offand feveral centuries before even the name of the
feudal law was known in Europe. The authority and jurifdi¢tion
of the Saxon lofds in England, appears to have been as great before

the conqueft, as that of,any of the Norman lords after it. But
the feudal law is not fuppofed to have become the common law
‘of England till ee conqueft. ‘That'the moft extenfive au-

thoritpand jufi(dictio / were poflefied by the great lords in France
allodially long before the feudal law was introduced into that
country, is a matter Of fact that admits of no doubt. That au-
thority anid’ théfe juti{diétions all neceffarily flowed from the ftate..”»
of property and manners juft now deferibed. Without, ‘femount-
ing to. the remote antiquities of either the French or Englith
monarchies, we may find in much later times many, proofs that fuch
effects muft always flow from fuch'caufes. It is not thirty years ago
fince Mr. Cameron of Lochiel, a gentleman of Lochabar in Scot-
land, without any legal warrant whatever, not béing what was then
called a lord of regality, nor even a tenant in:chief, but a vaffal of

-the duke of Arey and without being fo much as a juftice of.

peace,

THE WEALTH OF NATIONS,

499

‘peace, ufed, notwithftanding, to exercife the higheft criminal jurif- C aie
diétion over his own people. He is faid to have done fo with ~+y——_

great equity, though without any of the formalities of juftice; and
it is not improbable thatthe ftate of that part of the country
at that time made it neceflary for him to affume this authority in
order to maintain the publick peace. ‘That gentleman, whofe rent
mever exceeded five hundred pounds a year, carried, in 1745,
eight hundred of his own PROS into the rebellion with him,

Tue introduction of the feudal. law, fo far from extending, may
be regarded as an attempt.to moderate the authority of the great
allodial Jords, It eftablifhed a regular fubordination, aceompanied
with a long train of fervices and’ duties, “from the king down to
the {malleft proprietor. During the, minority of the proprietor,
the rent, together “with the management of his lands, fell into the
hands: of his immediate fuperior, and, confequently, thofe of all
great proprietors into’ the hands of the” king, “who was ‘charged
with the maintenance and education ' of the ‘pupil, and who, from

his authority as guardian, was fuppofed to have a right of dif-:

pofing of him in raarriage, provided it ‘was in a manner not un~
fuitable to his rank. But though this inftitution neceflarily tended
to ftrengthen the authority of the king, and to weaken ‘that of
the great proprietors, it could not do’ either fufficiently for eftablifh-
ing order ‘and good government among: infabitants of the
country ; betaufe it could’ not alter fufficiently that ftate of
property ard manners from: swhich the: difotders arofe. The
authority .of goyernment, ftill continued, to be, as before, too weak
in,the head and too ftrong in the inferior members, and the
exceffive ftrength of. the inferion.. members «was the caufe of the
weaknefs of the head, After “the inftitution of feudal fubordi-
nation, the king was as incapable of re(training the violence of

the great lords as before. Theysftill congunued to make war ac-
. ied” 7 oe ae cording

g00

THE NATURE AND CAUSES OF

B aa K cording to theit own difcretion, almoft continually upon one another,
= and’ vey frequently upon the king; and the open country (till

continued to be a feent of violence, rapine, and diferder.

Bur what all the Violence of the feudal inftitutions could never
have effected, the filent and infenfible operation of foreign commerce
and manufactures gradually brought about. Thefe gradually: fur-
nifhed the great. proprietors with fomething for which they could
exchange the whole furplus produce of their lands, and which they
could confume themfelves without fharing it either with tenants or
retainers. Ail for ourfelves, and nothing for other people, feems, in
every age of the world, to have been the vile maxim of the matters of
mankind. As foon, therefore, as they could find a method of con-
fuming the whole value of their .rents themfelves, they had no dif-
pofition to fhare them with any other perfons. For a.pair of diamond
buckles perhap$,.or for fomething. as frivolous and ufelefs, they
exchanged the maintenanee, or what is the fame thing, the price of
the maintenance Of a thoufand men for a year, and with it the
whole weight and-authority which it couldgivethem. The buckles,
however, were to be all their own, and no other human creature
was to have any {hare of them whereas in ‘the more antient
method of expence they muft-have fhared with at leaft a thoufand
people. With 'the judges that were to determine the Preference,

this difference was: perfectly decifive.; and thus, for the ¢ gratification
of the*moft childifh,” thé aneaneft and the ‘molt fordid of all
vanities, they gradually bartered their whole power and authority.

In a country where there is no foreignedmitherce, nor any of the
finer ‘manufaetures, a méan of tén’thoufind a year cannot Well
etieloy his revenue in any other wilyithan in-fdintaining, perhaps,

a thoufand “families, who are all of them neceffarily "ut his come
sternal. In the prefént ftate of Eufope, & mani of 'ten ‘thoufand a
year can fpend ‘his whole revenue, ‘and he -genéfally does fo, with.

va : out

THE WEALTH OF NATIONS.

gor

out dire€tly maintaining twenty people, or being able to command CH AP.
more than ten footmen not worth the commanding. Indireétly, t-+—

perhaps, te maintains as great or even a greater number of people
than he could have done by the antient method of expence. For
though the quantity of precious produétions for which he ex-
changes his whole revenue be very fmall, the number of workmen
employed in colle&ting and preparing it, muft neceffarily have been
very great. Its great.price generally arife: from the wages of their
labour,” and the profits of all their immediate employers. By
paying that price he indireétly pays all thofe wages and profits,
and thus indireCtly contributes to the maintenance of all the work~
"men and their employers. He generally contributes, however,
but a very {mall propurtion to that of each, to very few perhaps
a tenth, to many not a hundredth, and to fome not a thoufandth
nor even a ‘ten thoufandth part of their whole annual maintenance.
Though he contributes, therefore, to the maintenance of them all,
they are all more or lefs independant uf him, becaufe generally
they ‘can all be maintained without him.

Wen the great proprictors of land fpend their rents in main-
tdining their tenants and retainers, each of them maintains entirely
all his own tenants and all his own*etainers. But-when they fpend
them in maintaining tradefmen and artificers, they may, all of them
taken together, perhaps, ‘maintain as great, or, on account of the

wafte which attends ruftick ‘hofpitality, a greater number of people

than before. Each of them, however, taken fingly, contributes often
but a‘very:fimall fhare 'te;the maintenance of any individual of this
greater number.’ ach tradefman or artificer derives his. fubfiftence:
from the employment, ‘not of one, but of a hundred or a thoufand
different ‘cuftomers. Though in fome meafure obliged to them

all, therefore, he is not abflutely snr upon any one of

them. ee gal «
Tus

502

BOOK
II.

THE NATURE AND. CAUSES OF

Tue perfonal expence of the great proprietors having in’ this

vm manner gradually increafed, it was impoffible that the number of their

retainers fhould not as gradually diminifh, till they were at laft
difmiffed altogether. The fame caufe gradually led them to difinifs
the unneceffary part of their tenants. Farms'were enlarged, and the
occupiers of land, notwithftanding the complaints of depopulation,
reduced to the number neceffary for cultivating it according to the
imperfect ftate of cultivation and improvement: in thofe times.
By the removal of the unneceffary mouths, and by exa¢ting from

the farmer the full value of the farm, a greater furplys;,or what ee

is the fame thing, the price of a greater furplus, was obtained: for
the proprietor, which the merchants and manufacturers foon fur-
nifhed him with a method of {pending upon his own perfon in the
fame manner: as he had done the reft. The fame, caufe continu-.
ing to operate, he was defirous to raife his rents above what his
lands, in the actual {tate of their improvement, could afford. His
tenants could agree to this upon:one condition only, that they
fhould be fecured in their. poffeffiem, for-fuch a term of years as
might give them time to. recover with profit whatever they fhould
lay out in vhe further improvement of the land. The expenfive
vanity of the landlord made him willing to accept of.this sOnpaeR 3
and hence the origin of iin: leafes. , vt

Even a.tenant at will, who pays the full value offthe land, is
not altogether dependent upon. the landlord, ‘Jjhe pecuniary ad-
vantages which they receive from. one anothers are:nrutwal and
equal, and fuch a tenant wall expofe neithes :his life nog/his fortune
in .the fervice of the proprietor. - But if, he:has a leafefor a long’

term.of years, he is altogether independent ;. and his landlord muft
not expect from him even the moft trifling fervice beyond what is
either exprefily ftipulated in the leafe,; or impofed upon ines
by the common and. known, law ofthe country,

THE

THE WEALTH..OF NATIONS.

Tur tenants having in this»manner become independent,” and CHAP. 3
the retainers being’ difmiffed, the great proprietors were'no ‘longer waa i}

capable of interrupting the regular ‘execution of juftice, or of dif-
turbing the peace of the country. » Having fold their birth-right,

not like Efaufor a mefs of pottage'in time of hunger and neceffity,’

but in the wantonnefs of plenty, for trinkets and baubles fitter
to be the play-things of children, than the ferious purfuits of
men, they became as. infignificant as ahy fubftantial burgher or
tradefman in a. city. Aregular government was eftablifhed in
the country as wellas in the city, nobody having fufficient power
to difturb its operations in the one, any more than in the other,

Fr.does not, pethaps, relate to the prefent fubject, but I cannot
help remarking it, that very old families, fuch ashave poffefled
fome confiderable eftate from father to fon for many fucceffive
generations, are”’very rare incommercial countrier, In countries
which have little commerce, on; the contrary, fuch as Wales or
the highlands. of Scotland, they, are very common. The Arabian
hiftories feem to be all.full of genealogies, and there is a hiftory
written by a Tartar Khan which has been tranflated into feveral
European languages, and whith contains fcarce any thing elfe;
a proof that antient families are very common among thofe
nations. In countries where a rich man‘can fpend his revenue in
no other way than by maintaining as many people as it can main-
tain, he is not apt to run out, and his benevolence it feems is
feldom, 4a, violent agito attempt to maintain more than he can
afford.» But,where he ean {pend the, greateft revenue upon his

~ own perfon, he fredfipntly has. no bounds to his expence, becaufe

he requently ha#*no bounds’ to his vanity, or to his affection for

* his own perfon. In commercial countries, therefore, riches, in:

{pite ofthe moft violent regulations of law to prevent their diffi.
pation, very feldom remain lang in the fame family. Among
fimple:

593

524

THE NATURE AND CAUSES OF

B oo K {imple nations, on the contrary, they frequently do without: any
i—y—~ regulations of law; for among nations of fhepherde, fueh aa the

Tartars and Arabs, the confumable nature of their property: necef-
farily renders all fuch regulations impoffible. ai ME a

A REvoLuTion of the greateft importance to the publick ‘haps
pinefs, was in this manner brought‘about by two different orders
of people, who had not the leaft intention to ferve the public.
To gratify the moft childifh vanity was‘ the foie motive of the
great proprietors. The merchants .and artificers, mtich fefy ridi-
culous, aéted merely from a’ view to their own intereft, afd’ in
purfuit of their own pedlar principle of turning a penny wherever
a:penny was to be got. Neither of them had cither knowlédge! or
forefight of that great revolution which the folly of the one, and
the induftry of the other was gradually bringing about. :

Ir is thus that through the greater part of Europe the commerce

and manufactures of cities, inftead‘of being'the effeét, have been

the caufe and occafion. of the i improvement ie cultivation te the
country.

Tus order, however, being contrary to the natural courfe
of things, is neceffarily both flow and uncertain. Compare'the
flow progrefs of thofe European’ ‘countries of which’ the wealth
depends very much upon their commerce ‘ahd manufaétares,
with the rapid advances’ of our North Aniéricati*¢olotiies, of
which the wealth is founded altogether“it: agriculture. Through ,
the greater part of Europe, the number of habit ts #8 not fap-
pofed to double in lefs than five hundred years. \ feveral of our .
North American colonies, it is found to double in twenty or five
and twenty years, In Europe, the law of primogeniture,’and per-
petuities of different kinds, prevent the divifion of great eftates,

7 and

THE WEALTH OF NATIONS,

595

‘and thereby hinder the multiplication of fmall proprietors. A CHAP,
fmall: proprietor, however, who knows every part of his little —\—

‘tr’ tory, who views it ‘all -with the affection which property,
efpecially {mall property, naturally infpires, and who upon that
account takes pleafure not only in cultivating but in adorning it,
‘ig. generally, of ‘all improvers the moft induftrious, the moft inivlli-
gent, ‘and the moft fuccefsful. The fame regulations, befices,
keep fo much land out of the market, that there are always more
capitals to buy than there is land to fell, fo that what is fold always
fells at a monopoly price. The ‘rent never pays the intereft of the
purchafe money, and is befides burdened with repairs and other
occafional charges, to which the intereft of money is not liable.
To purchafe land. is every where in Europe a moft unprofitable
employment of a fmall capital. For the fake of the fuperior fecu-
rity, indeed, a man of moderate circumftances, when he retires
from bufinefs, will fometimes chufe to lay out his little capital in
Yand,. A man_of profeffion too, whofe revenue is derived from
another fource, often: loves to fecure his favings in the fame way,
But a young man, who, inftead of applying to trade or to fome
profeflion, fhould employ a capital of two or three thoufand
pounds in the purchafe and qultivation of a fmall piece of land,
might indeed expect to live very happily, and very independently,
but. muft bid adieu, forever, to all hope of either great fortune
or’ great illuftration, which by a - different emp!oyment of his
ftock he might have had the fame chance of acquiring with other
people. Such a perfon too; though he cannot afpire at being a
proprietor, will often difdain to be a farmer. The fmall quantity
of land, ‘therefore, which is brought to market, and the high
Price of what'is brought, prevents a great number of capitals from
being employed in ‘its cultivation and improvement which would
otherwife have taken that direétion. In North America, on the
contrary, fifty or fixty pounds is often found a fulficieat ftock

You. I, 3 7T to

So EO STS SR een

a a

506

THE NATURE AND. CAUSES (OF

BOOK to begin a plantation with. The: purchale and. imprereeumnt. of
Ut, uncultivated land, ig: thera. the mot peobiseble: emplapmetit of

the fmallef. ae,well, as-of, theigreateft cupitela..end the:moft: diredt
road ta alk the fortune and illu@sation which can bes: acqilivedc in
that. country, Such land, indeed, is is: North Ammesica: tobe

had: almoft for nothing, or: at: a. price mucls: below the: valag of

the natural produce; a thing impoffible in: Burope) ory indeed,
in any country where: all lands have long. beew private:property.
If landed eftates,, however, were divided equally: among. allthe
children, upon. the death of) any proprictor who left-4 numerots

family, the eftate would generally be fold, So mel fand would

come to market, that it could no longer fell’at:a monopoly price.
‘The free rent of the land would. go, neaser:to:pay the intemftiof

the purchafe money, and a Small capital might be employed in. pur-
chafing land as profitably as ~we then rEg foarte adaoiud
tap pap
ENGLAND, omaccount of the natural feeility of ‘the foil, ‘ob the
great extent of fea coaft in proportion torthat:of the whole deunty,

ard of the many navigable rivers which run through it, aad:afferd

the conveniency of water carriage: to fome of the mott inland parts.
of it, is perhaps as well fitted by patuse as any large country im:
Europe, to be the feat of foreign commerce, of :manufaGiuvea for
diftant fale, and of all the improvements which thefe:can/oecafiom
From the beginning of the reign of Elizabeth tog,. the: Englita

Jegiflature has. been peculiarly, attentive to, the interefts of. commende:

and manufactures, and in reality. there is no-country, in Esanope;.
Holland itfelf not excepted, of which the law js,upon the whole
more favourable to this fort of induftry. Commence.and, manyr
factures have accordingly been continually adyancing during, all
this period, The cultivation and improvement of the. countay
has, no doubt, been gradually advancing too: But it. igre; to
have followed Howiye: and at a diftance, the more rapid proyrefs of

commerce:

THE WEALTH OF NATIONS.

597

commence end manafactures. The greater part of the country CHAP.
mutt probably have been cultivated before the reign of Elizabeth; w+y—w

and a very’ great part of it {till remains uncultivated, and the
cultivation of the far greater part much inferior to what it might
be. The taw of England, however, favours agricultare not only
indire&ly ‘by the proteRtion -of commerce, .but by ‘feveral | direét
encouragements, Except in times. of {carcity, the exportation of
corn is not only free, but encouraged by a bounty. In times of
moderate plenty, the importation of foreign corn is loaded with
duties that amount 4o:a prohibition. The importation of live
cattle, except from Ireland, is prohibited at all times; and it is but of
late that it was permitted from thence. Thofe who cultivate the land,
therefore, have a monopoly againft their countrymen for the two
greateft and moft important articles of land-produce, bread and
butcher's meat. Thefe encouragements, though at bottom, perhaps,
as I fhall endeavour to fhow hereafter, altogether illufory, fufficiently
demonftrate at leaft the good intention of the legiflature to favour
agriculture. But what is of much more importance than all of them,
the yeomanry of England are rendered as fecure, as independent,
and as refpe€table as law can make them. No country, therefore,
in which the right of primogeniture takes place, which pays tithes,
and where perpetuities, though contrary to the fpirit of the law, are
admitted in fome'cafes, can give more encouragement to agriculture
than England. Such, however, notwithftanding, is the ftate of
its cultivation. What would it have been, had the law given no
dire€&t encouragement to agriculture befides what arifes indireétly
from the progrefs of commerce, and had left the yeomanry in
the fame condition as in moft other countries of Europe? It is
now ‘more than two hundred year's fince the beginning of the reign
.of Elizabeth, a period as long as the courfé of haman Peony
afually endures,

3 7T 2 FRANCE

508
BOOK
Ill.
Reese)

THE NATURE AND CAUSES OF

FRANCE feems to have had a confiderable fhare of foreign come.
merce near a century before England was diftinguifhed as a come
mercial country, The marine of France was confiderable,
according to the notions of the times, before the expedition of
Charles the VIIIth to Naples. The cultivation and improvement.
of France, however, is, upon the whole, inferior to that of.
England. The law of the country has never given the fame.
direct encouragement to agriculture, .

Tue foreign commerce of Spain and Portugal to the other
parts of Europe, though chiefly carried on in foreign fhips, is
very confiderable. That to their colonies is carried on in their own,
and is much greater, on account of the great riches: and extent
of thofe colonies. But it has never introduced any confiderable.
manufactures for diftant fale into either of thofe countries, and
the greater part of both ftill remains uncultivated. The foreign
commerce of Portugal is of older ftanding than that of any great
country in Europe, except Italy.

Iraxy is the only great country of Europe which feems te
have been cultivated and improved in every part, by means of
foreign commerce and manufactures for diftant fale. Before the
invafion of Charles the VIIIth, Italy, according to Guicciardin, .
was cultivated not lefs in the moft mountainous and barren parts.
of the country, than in the plaineft and moft fertile. ‘The ad-
vantageous fituation of the country, and the great number of
independent ftates which at that time fubfifted in it, probably
contributed not a: little to this general cultivation, It is not
impoffible too, notwithftanding this. general expreffion of one
of the moft judicious and referved of modern hiftorians,. that

| Italy

THE WEALTH OF NATIONS,

5°9

Italy was not at that time better cultivated than England is at CHAP.

—

“Tt ‘capital, however, that is acquired to any country by com-
merce” and ‘manufactures, is all a very precarious and uncertain
polfeffion, till fome part of it has been fecured and realized in the
cultivation and improvement of its lands. A merchant, it has

been faid very properly, is not neceffarily the citizen of any’ par-

ticular country. It is in a great meafure indifferent to him from
what place he ¢arries on his trade ; and a very trifling difguft will
make him remove his capital, and together with it all the induftry
which it fupports, from one country to another. No part of it
can be faid to belong to any particular country, till it has been
fpread as it were over the face of that country, either in buildings, or
in the lafting i improvement of lands, No veftige now remains of the
great wealth, faid to have been poffeffed by the greater part of
the Hans towns, except in the obfcure hiftories of the thirteenth
and fourteenth centuries, It is even uncertain where fome of them
were fituated, or to what towns in Europe the Latin names given
to'fome of them belong. But though the misfortunes of Italy
in the end of the fifteenth and beginning of the fixteenth cen-
tuties greatly diminifhed the commerce and manufactures of the
cities ‘of Lombardy and Tufcany, thofe countries ftill continue
to’ be among the moft populous and beit cultivated in Europe.
The civil wars: of Flanders, and the Spanifh government which.
fucceeded them, .chafed away the great commerce of Antwerp,
Ghent, and: Bruges. But Flanders, ftill continues. to be one of
the icheft, beft cultivated, and moft populous provinces of
- Eprope,, The ordinary revolutions of war and government eafily
dry,, up the fources, of that wealth which arites from commerce
only,; That which arifes from the more folid improvements of

7 agriculture,,

angel

FL TS

510 THE NATURE AND - CAUSES, &e:

B oa apriculture, is much ‘more durabie, and cannot be deftroyed but’

witless by thofe more violent convulfions occafioned by the depredations”
of hoftile and barbarous nations continued for a century or two.
together; fuch as-thofe that happened. for fome time before and
after the fall of ie Roman enapire ia the wrehoum provinces of .
Europe. ; eer

Esp of the First Votume.

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